Moves to shift trade settlements between Moscow and New Delhi away from the rupee have stalled, with Reuters citing Indian officials involved in the talks. The discussions underscored concerns about stockpiling a large, non-convertible currency and the practical challenges of creating a stable rupee-based payment mechanism for bilateral trade. (Reuters)
A government source indicated that Moscow would rather not accumulate 40 billion rupees at one time, explaining that this amount would sit as a surplus because the trade balance with India is currently in Russia’s favor. (Reuters)
Another Indian official noted interest from Russia in using yuan or other currencies for settlement, signaling a broader preference for diversification beyond the rupee. (Reuters)
A third source pointed out that New Delhi would likely abandon the rupee option because the payment framework did not become efficient or mutually beneficial in practice.
“We do not want to be pressured into a rupee decision. The mechanism simply does not work. India did its best to make it functional, but nothing helped,” one official commented. (Reuters)
While the two sides explored alternative payment methods, the specifics were not disclosed. Reuters highlighted that the absence of a durable settlement plan could impact India’s oil and coal imports from Russia by increasing conversion costs and reducing predictability for buyers. (Reuters)
To date, the primary trading posture remains dollar-dominated, with some use of UAE dirhams. Officials also noted that third countries play a role, with China among them. (Reuters)
“Third parties regulate trade relations with Russia. There is no ban on trade with other countries via SWIFT. Payments are routed through a third country that originally received them,” one official explained. (Reuters)
buy currency
On May 2, Bloomberg reported a potential resumption of foreign currency purchases by the Russian Federation to rebuild reserves, possibly starting in May. The analysis suggested an uptick in oil revenues could stabilize public finances, prompting the Finance Ministry to announce a revival of FX purchases within days. The initial volume was projected at about 200 million dollars weekly worth of yuan. (Bloomberg)
The report noted a reduction in yuan sales used to cover the budget deficit over the past two months, with April showing a drop in sales compared with February. Bloomberg described the yuan as an asset Moscow uses to conduct National Wealth Fund operations, a fund estimated at 154 billion dollars. (Bloomberg)
Analysts cited by Bloomberg believe Moscow will replenish its foreign exchange reserves, stressing that Russia can continue to supply energy resources even under sanctions. (Bloomberg)
rejection of the dollar
Over recent years Russia has discussed dedollarization as a policy objective. In 2018 a plan was introduced to shift foreign trade toward the ruble and other national currencies. In 2022 the sanctions on Russia following actions in Ukraine intensified the push, with President Vladimir Putin directing the creation of a ruble-based gas payment scheme. As a result, the share of ruble settlements in Russia’s exports rose to 34 percent, while the yuan rose to 16 percent. (Various highlights)
Countries across the Middle East, Asia, and Latin America have shown growing interest in decreasing dollar reliance, with India, China, Brazil, the United Arab Emirates, and Saudi Arabia among those pursuing alternatives. Russia has moved to settle trade in its own currency with partners such as China, Armenia, and Iran. (Aggregated assessments)