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Russian Foreign Minister Sergey Lavrov said that the suggested new ruble-based mechanism for payments for Russian natural gas supplies is a way to ensure payment guarantees for Moscow.
According to the minister, the decision made by Russia to demand payment in rubles for natural gas exports is quite understandable since Russian foreign assets have been frozen due to sanctions imposed after Moscow's special operation in Ukraine.
Lavrov said that since Gazprom's foreign bank accounts can easily be frozen due to sanctions, Western buyers will instead pay for gas using Gazprombank, an independent institution, through a special account they will have to open at this bank.
The official went on to say that Gazprombank will be handling the conversion of payments into rubles, as buyers will continue to make their payments in the currency of their preference.
Thus, Russia will have guarantees even if buyers pay in euros or dollars, Lavrov said, noting that Russian gas supplier Gazprom will be able to be paid the amount owed in the national currency removing the threat posed by sanctions.
#Russia plans to take legal action over blocking of gold, forex and assets belonging to Russian residents, Central Bank Governor Elvira Nabiullina said on Mon. Foreign sanctions have frozen about $300 billion of around $640 billion that Russia had in its gold and forex reserves. pic.twitter.com/vsuMWykroh
On March 31, a decree signed by the President of Russia, Vladimir Putin, brought into force a new mechanism based on the ruble for the payment of Russian natural gas deliveries.
The new mechanism required that non-friend countries that have imposed sanctions on Moscow will no longer be able to use Gazprom's accounts in foreign banks to make payments but will have to transfer gas payments through the authorized Russian bank.
In this regard, the Russian government issued a warning that countries refusing to change to the new payment mechanism will default on their current gas supply contracts resulting in a halt in supplies.