Through the voice of its president, Recep Tayyip Erdogan, Turkey has announced that it will pay for its purchases of Russian gas in rubles while the country is experiencing unprecedented inflation.
Turkish President Recep Tayyip Erdogan has confirmed that Russian gas deliveries to Turkey will be paid for in rubles, Turkish media reported on Saturday. “A positive aspect of our visit to Sochi is our agreement with Mr. Putin on the rouble. God permitting, our exchanges in rubles will ensure benefits for Turkey and Russia,” said the head of the Turkish state to journalists aboard his return flight from Sochi (Russia), on the shores of the Black Sea, where he met Russian President Vladimir Putin on Friday.
The two presidents have agreed that deliveries of Russian gas to Turkey will be “partially paid for in rubles”, Russian Deputy Prime Minister Alexander Novak announced on Friday evening. Erdogan did not specify the volume of future transactions in rubles.
Russia has been seeking for months to impose its currency in international settlements against the euro and the dollar, amid unprecedented Western economic sanctions against Moscow over its invasion of Ukraine. While swiftly condemning the Russian offensive, Turkey opted for neutrality between the two countries and did not join Western sanctions against Moscow.
In 2021, Russia accounted for around a quarter of Turkey’s oil imports and 45% of its natural gas purchases. Paying for Russian gas, even partially, in rubles could allow Turkey not to further reduce its currency reserves in dollars. Economists say the Turkish government spent tens of billions of dollars last year trying to stop the collapse of the Turkish lira, which has lost nearly half its value in a year. Mr. Erdogan and Mr. Putin also pledged in Sochi to strengthen energy and economic cooperation between the two countries.
Inflation approached 80% in June in Turkey, the highest since 1998, despite Turkish President Recep Tayyip Erdogan’s repeated promises to contain price increases, less than twelve months before a presidential election announced as close. This strong rise in consumer prices, which stood at 78.6% over twelve months, against 73.5% in May, is largely explained by the collapse of the Turkish lira, which lost nearly half its value in one year against the dollar.