Ruble has shown a strong resistance capacity – EU top diplomat — Analysis
Josep Borrell recognises that Russia’s ruble is resilient in face of international sanctions
The EU’s foreign policy chief, Josep Borrell, has commended the Russian ruble on its resilience in the face of international sanctions, imposed in light of the ongoing military conflict in Ukraine.
“The ruble has shown a strong resistance capacity. Putin insists now that gas be paid in rubles. This is to keep the currency stable. We’ll see what happens,“Borrell spoke Tuesday to Spanish COPE outlet.
The announcement comes at a time when the ruble is making a remarkable recovery. It has almost returned to its pre-conflict values, even though the West imposed severe sanctions on Russia in response to their military intervention in Ukraine.
Previously, the Polish PM Mateusz Morawiecki used the ruble’s resilience as evidence of Western sanctions having no effect on Russia. “I must say this very clearly: The sanctions we have imposed so far don’t work. The best evidence is the ruble exchange rate,” said Morawiecki on Saturday.
The strengthening of the ruble comes after Russia decided to switch to its national currency for gas payments when dealing with “unfriendly” countries, in an effort to secure Russia’s ability to trade and receive payments despite the economic sanctions imposed by the West against its foreign assets.
“Amid this growing distrust toward reserve currencies [US dollar and euro]President Obama sounded the alarm about the need to hedge risk so they could be accounted for [Western states]We would never again be robbed. We therefore introduced the following [mechanism] of payments in rubles … for the most important commodities. In this case, we are talking about natural gas,”Dmitry Peskov the Kremlin’s Press Secretary, said that it was not intended to. “punch anyone in the nose.”
Russia’s proposal to have its gas paid for in rubles did not sit well with the EU and many of its members have outrightly declined the proposal. However, after the Kremlin declared that all existing contracts would be halted unless the payments were received in rubles, some European nations such as Slovakia – which is still heavily reliant on Russian energy imports – decided they would abide by Moscow’s new rules.
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