Guy Faulconbridge

LONDON, (Reuters) – The Kremlin suggested Wednesday that Russia’s commodity and energy exports might be valued in roubles. This is a tougher attempt by President Vladimir Putin to force the West to feel the consequences of its sanctions for Ukraine’s invasion.

Russia is facing the worst crisis in its economy since 1991’s collapse of Soviet Union. Putin called out the West on March 23, ordering that Russian gas exports be paid in rubles.

Germany was Europe’s largest economy and it took this action to make a “early warning” on Wednesday that the country could face a shortage of gas. Last year, 55% of Germany’s gas came from Russia.

Russia’s top lawmaker said Wednesday, in the clearest signal that Russia might be planning a tougher response against the West’s sanctions.

When Dmitry Peskov, Kremlin spokesperson, was asked about Vyacheslav Volodin’s comments to parliament speaker Vyacheslav Vodin said that “This idea should be definitely worked on.”

Peskov stated that the proposal could be “worked out”.

Peskov stated that the U.S. Dollar’s status as global reserve currency has already been affected and that pricing Russia’s largest exports in rubles would “in both our and our partners’ interests.”

Europe imports around 40% of its natural gas from Russia, and it pays mainly in euros. Gazprom, Russia’s state-controlled giant gas, has been ruled out of the right to withdraw contracts.

Volodin posted on Telegram, “If you need gas find roubles.” The country would benefit from an increase in the number of products that are priced in rubles, such as fertilisers, grains, oils, and oil.

Russia annually exports to Europe several hundred billion dollars of goods. According to Gazprom, 58% of Gazprom’s exports are made in euros, 39% in dollars, and 3% in sterling,

However, it is not clear how payments will be done as of Wednesday.

Peskov stated that Russia would not demand buyers immediately pay in rubles for gas exports. He promised a gradual change.

SANCTIONS “BOOMERANG”

Russian officials claim that West’s efforts to exile one of the biggest natural resource producers in the world is self-harm. It will cause consumers to pay more and push the United States into recession.

Russia asserts that sanctions and the particular freezing of around $300 billion in Russian central banks reserves are a declaration economic war.

Putin claimed that Russia’s freezing of its reserves is a breach of West’s obligations towards Russia. It would cause a decline in confidence in both the U.S. dollar (USD) and the Euro.

Dmitry Medvedev was the former president. He said that sanctions were “boomeranged” and had been used to damage the economies of North America and Europe. It drove up the cost of fuel, heating, and also eroded the confidence in the dollar.

Medvedev stated that the world is awakening and confidence in reserve currencies has been melting. It is no longer a dream to abandon the dollar and euro as world’s major reserves.

Medvedev claimed that the West’s “crazy politicians,” had paid their taxes to secure an inexorable victory in Ukraine. “The time of regional currencies has arrived.”

Russia’s long-term goal is to decrease its dependence on the U.S. dollar. However, Russia’s main exports, oil, gas, and metals, are still priced on international markets in dollars.

The dollar is the world’s most widely traded currency. It is followed closely by the yen, euro and pound.