Putin says Western 'economic blitz' has failed, foreign trade needs to switch to rouble

"The restrictions imposed on Russia by unfriendly countries have affected domestic business opportunities, hampered the logistics of export and import supplies and created obstacles to settlement," Vladimir Putin said on Monday in a video conference on economic issues.

"We need to give maximum help to entrepreneurs to solve these problems,

INCLUDING SPEEDING UP THE TRANSITION TO SETTLING FOREIGN TRADE IN ROUBLES AND THE NATIONAL CURRENCIES OF RELIABLE PARTNER COUNTRIES.

I would like to stress that we need to move much faster in the new, changed circumstances," he added.

“Russian manufacturers will need to search for new partners, logistics, or switch to the production of products of previous generations,” Central Bank Governor Elvira Nabiullina said on Monday.

Exporters would need to look for new partners and logistical arrangements and “all this will take time”, Nabiullina said.

She said the central bank was considering making the sale of forex proceeds by exporters more flexible.

Putin announced on 23 March that Russia would accept natural gas in roubles from countries considered unfriendly in the context of the war against Ukraine, including all EU countries. The President had already indicated at the time that the list of Russian export commodities traded for roubles would be extended.

Russian presidential spokesman Dmitry Peskov told reporters on Monday that

INFORMATION ON HOW MANY COUNTRIES HAVE AGREED TO BUY GAS FOR RUBLES are NOT BE PUBLISHED.

He added that the payment would be negotiated directly with the buyers by the Deputy Prime Minister in charge, Alexander Novak, and Gazprom. Peskov said that payment for deliveries after Putin's decree would be due sometime in May, so, he said, "there is still some time left".

Novak wrote in an article at the end of last week that switching to rouble accounting stems from Russia's need to get a 100% payment guarantee while the West is freezing Russian assets. According to the Deputy Prime Minister, Moscow's proposed system of settling gas trade in roubles is very convenient for customers, and some countries have already agreed to switch to payment in this currency.

Putin said on Monday that the barrage of Western sanctions imposed against Russia over its invasion of neighbouring Ukraine has failed.

He added the West “expected to quickly upset the financial-economic situation, provoke panic in the markets, the collapse of the banking system and shortages in stores”.

He added that

"the strategy of the economic blitz has failed” and instead led to a “deterioration of the economy in the West”

where inflation and unemployment have risen, the rate of economic growth has dwindled and Europeans' living standards and the value of their savings have fallen.

Retail demand has returned to normal after a short period of booming demand, and that stocks in the network had been restored without the need for market controls.

"We have done the right thing by not resorting to manual regulation of the market, but by giving private companies the freedom to find the most appropriate and efficient solutions," he said.

He stressed that the budget must now actively support the liquidity of the economy with financial resources in a context of limited availability of credit. He said it was crucial to support domestic demand to avoid excessive contraction. He added that caution is needed, but pointed out that there are opportunities, with the budget having achieved a record surplus in the first quarter.

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