London: In an effort to prop up the value of the ruble that plunged post the massive sanctions imposed on Moscow by the US and European countries over the war in Ukraine, Russian President Vladimir Putin on Wednesday announced that the “unfriendly countries” must use rubles to buy the Russian oil and gas.
Putin said, “I have made a decision to implement in the shortest possible time a set of measures to switch payments for … our natural gas supplied to the so-called unfriendly countries to Russian rubles,” reported New York Times.
Sanctions aimed at the Russian central bank effectively froze hundreds of billions of dollars of assets. Putin said that the freeze was proof that the dollar and euro “compromised themselves” and were unreliable.
Claus Vistesen, the chief Eurozone economist at Pantheon Macroeconomics, said the action meant that every time a Western country bought a barrel of oil it would be “propping up his domestic currency.”
Claus mentioned, “If you’re invoiced in rubles, you’ve got to go out and buy rubles,” adding “I don’t know if there is a workaround,” reported the NY Times.
After US President Joe Biden announced a ban on Russian oil, natural gas and coal imports to the US a senior administration official said that Russia has become a global economic and financial pariah. Biden announced a ban on the US import of Russian energy in a bid to ramp up sanctions on Russia for invading Ukraine.
