Russia's Vladimir Putin says 'euro is completely acceptable' for Russian gas payments

While speaking at the St Petersburg International Economic Forum on June 4, Russian President Vladimir Putin said that the European nations should pay for Russian gas in euros. The move came after Russia said that it will completely remove the US dollar from its National Wealth Fund, which accumulates oil revenues to increase the country's resilience to market fluctuations and help support major national projects. The move is intended to counter American pressure two weeks before a scheduled summit between Putin and US President Joe Biden. 

Putin said, “The euro is completely acceptable for us in terms of gas payments. This can be done, of course, and probably should be done”. 

Russia long has moved to reduce the dollar’s share in its hard currency reserves as it has faced waves of US sanctions amid tensions with Washinton and its allies. Even Russia’s state-owned energy companies have been turning to non-dollar settlement. Now, its National Wealth Fund (NWF) will also be turning its dollar-dominated assets into euros, yuan, and gold. 

USD holdings cut due to 'threats of sanctions'

According to PTI, a day before Putin’s comments, Russia’s Finance Minister Anton Siluanov told the economic forum in St Petersburg that that country’s shift from the US dollar will take a month, and once it’s completed the fund will have 40 per cent of its holdings in euros, 30 per cent in yuan and 20 per cent in gold. Additionally, the British pound and Japanese yen each will account for 5 per cent. It is worth mentioning that the NWF held about $185 billion worth of total assets as of last month, part of the nation’s gold and hard currency reserves that stand at the equivalent of about $600 billion overall. 

When asked about the announcement, Kremlin spokesman Dmitry Peskov said that many countries, including Russia, have sought to ease their dependence on the dollar amid growing “concerns about the reliability of the main reserve currency”. In a separate statement, Russia’s Deputy PM Andrei Belousov said that the decision to cut the dollar holdings was linked to “threats of sanctions that we have received from the US leadership”. Meanwhile, Russia’s ties with the US are at their lowest since Cold War times after Moscow’s 2014 annexation of Ukraine’s Crimea, accusations of Russian interference in elections, hacking attacks and other issues. 

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