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Russia looks at alternatives to dollar for energy transactions

Section: Daily Dispatches

By Max Seddon and Henry Foy
Financial Times, London
Sunday, October 13, 2019

MOSCOW -- Russia is exploring currency settlements in euros and roubles for its vast energy exports in an attempt to avoid the dollar and insulate Moscow from the U.S.-led global financial system.

Maxim Oreshkin, Russia's economy minister, told the Financial Times that Russia wanted to minimise its exposure to the United States by attracting more investors through rouble settlements.

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"We have a very good currency. It's stable. Why not use it for global transactions?" Mr. Oreshkin said in an interview.

"We want [oil and gas sales] in roubles at some point," he said. "The question here is not to have any excessive costs from doing it that way, but if the broad ... financial infrastructure is created, if the initial costs are very low, then why not?"

Kremlin-controlled Gazprom exported $51 billion worth of natural gas to Europe last year, while state-owned Rosneft exported 123.7 million tonnes of oil.

Moscow has looked to offset its exposure to U.S. economic sanctions through a "de-dollarisation" scheme that has seen the finance ministry's bond program issue all new debt in euros and roubles. The central bank has reduced its holdings of U.S. treasury debt from $96 billion to just $8 billion in the past 18 months.

"You have negative rates in euros and you have positive rates in roubles with stable and predictable inflation," he added. "There are no capital controls. It's fully flexible. You can get in or get out at any time." ...

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