Russia dumps US dollar for dirhams to counter sanctions Russian President Vladimir Putin meets Iranian President Ebrahim Raisi after arriving in Tehran yesterday. He was due to later meet Iran’s Supreme leader Ayatollah Ali Khamenei and Turkish President Recep Tayyip Erdogan. This is Mr Putin’s first trip outside Russia since he travelled to China in February.

MOSCOW. – Russia is seeking payment in United Arab Emirates dirhams for oil exports to some Indian customers, three sources said and a document showed, as Moscow moves away from the US dollar to insulate itself from the effects of Western sanctions.

Russia has been hit by a slew of sanctions from the United States and its allies over its attack on Ukraine in late February, which it terms a “special military operation”.

An invoice seen by Reuters shows the bill for supplying oil to one refiner is calculated in dollars while payment is requested in dirhams.

Russian oil major Rosneft is pushing crude through trading firms including Everest Energy and Coral Energy into India, now its second biggest oil buyer after China.

Western sanctions have prompted many oil importers to shun Moscow, pushing spot prices for Russian crude to record discounts against other grades.

That provided Indian refiners, which rarely bought Russian oil due to high freight costs, an opportunity to snap up exports at hefty discounts to Brent and Middle East staples.

Moscow replaced Saudi Arabia as the second biggest oil supplier to India after Iraq for the second month in a row in June.

At least two Indian refiners have already settled some payments in dirhams, the sources said, adding more would make such payments in coming days.

The trading firms used by Rosneft have started asking for the dollar equivalent payment in dirhams from this month, the sources said.

Russia wants to increase its use of non-Western currencies for trade with countries such as India, its foreign minister Sergi Lavrov said in April.

The country’s finance minister last month also said Moscow may start buying currencies of “friendly” countries, using such holdings to influence the exchange rate of the dollar and euro as a means of countering sharp gains in the rouble.

The Moscow currency exchange is preparing to launch trading in the Uzbek sum and the dirham.

India’s central bank last week introduced a new mechanism for international trade settlements in rupees, which many experts see as a way to promote trade with countries that are under Western sanctions, such as Russia and Iran.

Meanwhile, Five African nations are among 10 countries which are most exposed to the global poverty impact due to the cost of living crisis linked to the conflict in Ukraine, according to an international report.

The United Nations Development Programme listed Burkina Faso, Ghana, Kenya, Rwanda and Sudan in its report as some of the countries facing the most drastic impact of the Ukraine crisis across all poverty lines.

The report said 3 percent of the population on average in the 10 countries could fall into poverty.

“We are witnessing an alarming growing divergence in the global economy as entire developing countries face the threat of being left behind as they struggle to contend with the continuing Covid-19 pandemic, crushing debt levels and now an accelerating food and energy crisis,” said Achim Steiner, the UNDP administrator.

Steiner said new international efforts can take the wind out of the vicious economic cycle, saving lives and livelihoods.

This comes even as the International Committee of the Red Cross warned that millions of people in parts of Africa and the Middle East are at risk of severe hunger in the coming months as extreme poverty, inequality and food insecurity rise due to climate change linked drought, the ongoing conflict in Ukraine and Covid-19 impact.

“We face an urgent and rapidly deteriorating global food security situation, especially in parts of Africa and the Middle East. Armed conflict, political instability, climate shocks and the secondary impacts of the Covid-19 pandemic have weakened capacities to withstand and recover from shocks,” said Robert Mardini, director-general of the ICRC, in a statement yesterday.

The organisation warned that the number of malnourished children is expected to rise in the coming weeks as children are disproportionately affected by food crises. – Agencies

You Might Also Like

Comments