‘This is a problem. Added up billion rupees, but…”: Russian Foreign Minister Sergey Lavrov

Russian Foreign Minister Sergey Lavrov said on Friday that Russia has billions of rupees in Indian bank accounts, but to use this money it must be transferred to another currency and this is now being discussed. The comment comes after it was announced that India and Russia have suspended negotiations on bilateral trade in rupees.

When asked about the suspension of rupee-ruble trade talks at a press conference following the meeting of the SCO Council of Foreign Ministers, Russian Foreign Minister Sergey Lavrov said: “As for the rupees, this is a problem. Because we have accumulated billions of rupees in Indian bank accounts. We have to use this money, but to use this money it has to be transferred to another currency and this is being discussed now.”

Citing two government officials, Reuters reported on Thursday that after months of negotiations, India has failed to convince Russia to keep rupees in the treasury. An Indian government official had told the news agency that Russia believes it will end up with an annual rupee surplus of more than $40 billion if a rupee clearing mechanism is put in place due to a large trade gap favoring Russia.

The report said Russia views the accumulation of rupees as “not desirable”.

However, a Russian official denied the report, saying “No change in bilateral developments, wishful thinking by Western news agencies,” according to ANI.

Shortly after the invasion of Ukraine last February, India began exploring a rupee settlement mechanism with Russia. However, most trading still takes place in dollars. While India and Russia have discussed the possibility of facilitating local currency trading, no formal guidelines have been set.

Read also: India, Russia Suspend Rupee Settlement Negotiations, Claims Report. Russian official says ‘no change’

India’s imports from Russia have risen from $10.6 billion to $51.3 billion since Russia’s invasion of Ukraine in February last year. Discounted oil has made up a significant portion of India’s imports and has risen twelvefold over this period. Meanwhile, India’s exports to Russia fell slightly from $3.61 billion to $3.43 billion, the report said.

On the other hand, the two-day meeting of SCO foreign ministers in Goa began on Thursday with Jaishankar holding several bilateral talks. S Jaishankar met with Russian Foreign Minister Sergey Lavrov and both sides agreed to follow a “fair multipolar system of interstate relations”, which indirectly alluded to Western economic sanctions in the aftermath of the war between Russia and Ukraine.

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ABP News Bureau

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