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Turkey to pay for some Russian gas in rubles

, August 8, 2022, 0 Comments

turkey-lira-marketexpress-inTurkish President Recep Tayyip Erdogan also says his country will extend use of Russia’s Mir payment system. His announcements came after meeting with Russian leader Vladimir Putin in Sochi.

Turkey will switch part of its payments for Russian gas to rubles and plans to deepen ties with Russia by extending the use of Russia’s Mir payment system, President Recep Tayyip Erdogan said Saturday.

Erdogan made the remarks a day after his meeting with Russian leader Vladimir Putin in Sochi.

Moscow originally made the announcement late Friday after the two leaders had their four-hour confab in the North Caucasus. Neither side detailed what percentage of payments would occur in rubles.

The move puts Erdogan at odds with the United States, which has led the international push to sanction Russia following the invasion of Ukraine on February 24.

Ruble payments help Russia avoid dollar payments and restrictions placed on those payments because of sanctions.

What did Erdogan say about Turkish banking?

Following that visit on Friday, Erdogan told reporters on his return flight that there is a new “road map” to enhance bilateral relations that will serve as a “source of power between Turkey and Russia in financial terms.”

Turkey said five banks were at work to extend the use of the Mir payment system, making things easier for Russian tourists in Turkey, one of the few remaining countries in Europe still offering flights to and from Russia.

The European Union, of which Turkey is not a member despite flirting with the possibility in the early years of Erdogan’s rule, has closed its airspace to Russian planes and revoked landing rights for Russian carriers.

Russia’s fleets are also sanctioned in such a way that new parts for old aircraft, along with maintenance, are difficult to obtain.

In addition to those sanctions, key Russian banks have been excluded from the SWIFT transnational banking communication network, making transferring money an exceedingly difficult task for Russians in most banks across the world.

Russians accounted for the second-largest number of tourists in Turkey in the first half of 2022, with German tourists being the only ones outnumbering them.

Does Turkey rely on Russian gas?

Turkey is a NATO member state, and its move to boost trade with Russia underscores the dependence on Russia for energy, along with other areas of the economy.

Russia provides roughly a quarter of Turkey’s oil imports and accounts for almost half of its natural gas purchases in 2021.

Russia is also building the country’s first nuclear power plant as part of a joint venture with Ankara.

ar/fb (AFP, dpa)