Many European countries import oil and/or gas from Russia. Russia demands payment in rubles, the European countries mostly insist on payment in Euros. I'm sure both sides have good reasons, but I don't get them.

Let's say Germany owes one million Euros. The current exchange rate is 100 rubles for 1 Euro. We may assume that this is artificially high, and actually one Euro is worth say 200 rubles.

Germany could exchange one million Euros for 100 million rubles and send that to Russia, but they refuse. But Russia could also take a one million Euro payment and exchange it for 100 million rubles, exact same result. But they both refuse. So I must be missing something, but what am I missing here?

  • There is a sanction against the Central Bank of Russia related to "the management of [its] reserves as well as of assets”. If you exchange large amounts of Dollars or Euros for Rubels, you create demand for Rubels and reduce the exchange rate. That violates sanctions.
    – Roland
    Commented Apr 29, 2022 at 10:47

2 Answers 2


Although now the recovered to pre-war levels in the immediate aftermath of the invasion it fell to an all-time low of 89.60 against the dollar. Which prompted them to take many measures to save its value, because their alternative source of money is their foreign reserves. Here is Russia's foreign currency reserve: enter image description here

As you can see a lot of it is held by anti-Russia, Pro- Western countries, who by freezing their Euro and $ reserve have cut Russia off from that. While Gold is useful for printing money against, it cannot be used for trade, Russia relies heavily on imports: enter image description here

Now, Russia knows that Germany is forced to buy gas from them since there is no alternative. By making Germany pay in Roubles, Germany's own currency will be forced to devalue against the Rouble, making it stronger. Allies like Hungary have already agreed to do this and go around sanctions. Orban paid a Russian institute owned by Gazprom in Euros who then paid the equivalent in Roubles to the Russian state, which is what Putin wants. Europe wishes not to violate their own sanctions and block Russia from accessing foreign currencies except for the interest on their debt payments.

  • 1
    Orban paid a Russian institute owned by Gazprom in Euros who then paid the equivalent in Roubles to the Russian state, which is what Putin wants. --- So, Orban paid Russia in EUR, not in Ruble.
    – user366312
    Commented Apr 29, 2022 at 12:55
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    Well yes, its a loophole mon ami
    – Ash Rivers
    Commented Apr 29, 2022 at 13:02
  • 1
    So, if Russian banks can't spend EUR in the first place as they are cut off from the international network, what will they do with the EUR that Orban paid to them?
    – user366312
    Commented Apr 29, 2022 at 13:09
  • It did what they wanted @user366312. When the gazprom owned people bought Roubles against the Euro, it helped the value of the euro. When you buy one currency against another you create favorable conditions.
    – Ash Rivers
    Commented Apr 29, 2022 at 14:11

As far as I understand, Russian banks are expelled from the international monetary network that predominantly goes through American banks. As a result, even if Russia has billions of USD or EUR in its reserves, it can't spend from that reserve.

Therefore, Putin is using his gas supply network to Europe as his weapon.

On the other hand, EU countries don't want to break their own sanctions on Russia.

Hence, this trouble.

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