Putin says Turkey and Russia are nearing a deal for 25% of natural gas supplies to the country to be paid for in roubles
- Turkey will pay for 25% of its natural gas supplies in roubles, Putin said on Friday.
- Russia has secured similar payment deals since being hit with sanctions from the west.
Turkey is set to sign a deal promising that it will pay for 25% of its Russian natural gas imports in roubles, President Vladimir Putin said on Friday.
Putin announced the deal during a meeting at the Shanghai Cooperation Organization summit, Reuters reported. He didn't specify when the deal would take place, but noted it would kick in "in the near future."
Russia has been working to secure similar payment deals since being hit with western sanctions, looking to secure cash flows as it remains shut out of international payment networks.
China, one of Russia's largest fuel customers, has agreed to pay for gas in primarily yuan and roubles. India, another big buyer of Russian fuel, was set to close on a deal in July that agreed to pay for supplies in the currency of the United Arab Emirates, rather than US dollars.
And Russia is also willing to punish its other natural gas customers for not complying with its payment demands. Flows were halted from Poland and Bulgaria earlier this year after the countries refused to pay in roubles, and it slashed a delivery to one Asian customer for not signing a contract that agreed to pay in currencies other than the US dollar.
Those measures have increased demand for the Russian currency. So far, the ruble has rallied 40% since the start of the war – but some experts think that could actually be a headwind to Russia's economy, as a more expensive rouble means lowered demand for its oil and gas exports, which makes up nearly half of its GDP.
The Bank of Russia cut interest rates in July by 150 basis points to cap the value of its currency, in addition to offering its Asian energy customers steep discounts. Russia's central bank later added that it was interested in increasing its reserves of Chinese, Indian, and Turkish currencies, and shifting away from "toxic" currencies, mainly the US dollar and the euro.