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11 Aug, 2022 10:22

Russia and Turkey reach deal to ditch dollar in trade

Ankara agrees to pay for some of Russian natural gas supplies in rubles
Russia and Turkey reach deal to ditch dollar in trade

Russia and Turkey have reached an agreement in principle to switch some of the payments for Russian natural gas to rubles as part of deepening trade ties between the two countries, the Turkish energy ministry announced on Thursday.

The move to avoid payments in US dollars helps both countries. Russia has called the currency “toxic,” as Western sanctions make it difficult to conduct transactions. It also helps Turkey protect its dwindling hard-currency reserves.

Last week, Turkish President Recep Tayyip Erdogan confirmed that Ankara would start paying for some natural gas imports from Russia in rubles after several hours of talks with his Russian counterpart Vladimir Putin in Sochi.

The two nations also signed a roadmap for economic cooperation that envisages bringing bilateral trade turnover to $100 billion a year. The presidents also discussed a broad range of issues, including Ukrainian grain exports.

Earlier this month, Putin said EU countries should be grateful to Turkey for ensuring a reliable supply of Russian gas to the bloc via the TurkStream pipeline.

The agreements come amid unprecedented Western sanctions on Russia over its military operation in Ukraine. Turkey has refused to join the sanctions, and instead has pushed for truce talks between Moscow and Kiev.

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