U.S. sanctions placed on Russia have led to Russian President Vladimir Putin firing back.
As retribution for the U.S. sanctions against Russia, Putin has signed an order which will force ‘hostile’ nations to pay for Russian energy using the Russian Ruble, as opposed to the standard U.S. Dollar.
Aside from endangering the petrodollar system, and driving down demand for the Dollar, this move has caused the Ruble to retrace much of its prewar value.
Despite European nations publicly denying his request, and Germany even halting construction of the Nordstream 2 pipeline when the conflict first broke out, it now appears as if many of those powers are quietly buying Rubles to pay for Russian energy.
Trending: Noah’s Nightly Newsletter – 5/25/22
Putin recently aired his immediate policy change for the world to see:
PUTIN: All gas contracts with "unfriendly countries" must be paid in Rubles starting April 1st. Failure to pay in Rubles will result in the gas being shut off.
"We are not going to be involved in charity…" pic.twitter.com/JYDPtdaahQ
— Election Wizard 🇺🇸 (@ElectionWiz) March 31, 2022
I had a chance to speak with @PaulGreaney_NTD about the latest impact of the Russo-Ukrainian war on financial markets, including why the Russian Ruble $USDRUB has been rebounding: https://t.co/7xhPBQlESC
— Christopher Vecchio, CFA (@CVecchioFX) April 1, 2022
According to The Epoch Times, the IMF warns:
The sanctions may result in a more fragmented international monetary system, warned Gopinath.
She had previously said that the sanctions against Russia would not foreshadow the demise of the dollar as the world’s reserve currency and that the Ukraine crisis would slow growth, but not cause a global recession.
Day 36: Russian ruble at 84/$1, close to its pre-Feb. 24 rate. Sanctions remain a joke as spineless Germany can't live without RU gas/oil. RU pummels Ukraine from the air, knocking out oil, fuel & food depots – and killing innocents. The genocide goes on as world is mostly MIA.
— Brian Bonner (@BSBonner) March 31, 2022
Cold War 2.0 in near.
The Russian Central Bank is buying gold in bulk.
It is also putting saying: want Russian Oil, pay in Ruble.
Russians are cutting off from USD and is trying to create a self-sufficient economy.
If this experiment works, several countries will follow.
— Akshat Shrivastava (@Akshat_World) April 1, 2022
The Wall Street Journal reports that the Russian Ruble has reclaimed the value that it lost when sanctions were first announced:
Western sanctions capped the Russian central bank’s ability to sell its reserves denominated in dollars and euros to support the ruble’s value.
But carve-outs in the sanctions allow Europe to continue buying Russian energy and ensured dollars and euros continue to flow.
Russia ordered its exporters, such as oil and gas companies, to sell 80% of their foreign-currency revenues and buy rubles, helping the currency appreciate.