Comment: Because no one is seriously divesting from Russian oil and gas, this means Western countries will effectively support and even STRENGTHEN the Russian currency!

Gas Russia
© Sputnik / Alexey VitvitskiyThe change will affect energy exports to "unfriendly countries"
Russia will now accept payment for gas exports to "unfriendly countries" in rubles only, President Vladimir Putin said at a meeting with the government on Wednesday.

The president explained that Russia plans to abandon all "compromised" currencies in payment settlements. He added that illegitimate decisions by a number of Western countries to freeze Russia's assets destroyed all confidence in their currencies.

"I have decided to implement in the shortest possible time a set of measures to change the payments for - yes let's start with this - for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions," the Russian president said.

"It doesn't make sense to deliver our goods to the EU and the US and get paid in dollars and euros," he added.

Putin gave the Central Bank and the government a week to determine the procedure for operations for buying rubles on the domestic market for importers of Russian gas.

The president added that Russia will continue to supply gas in accordance with the volumes and pricing principles of the contracts. Only the currency of payment will change.

The announcement caused a spike in the cost of contracts for gas supply at the TTF European hub, Forbes Russia quoted data from the Intercontinental Exchange as indicating. During Wednesday's trading, the gas price rose from โ‚ฌ97 per megawatt hour (MWh) to approximately โ‚ฌ108.5 per 1MWh, but after the president's speech, it jumped by another โ‚ฌ10 to โ‚ฌ118.75 per 1MWh, before retreating to โ‚ฌ114 per 1MWh as of 1pm GMT.

In the past month, Russia has been hit with several rounds of unprecedented international sanctions over its military operation in Ukraine. The US, EU, and their allies have cut off the country from their financial systems, limited dollar and euro transactions, and froze roughly $300 billion in Russian forex reserves abroad, among other measures. At the same time, they have continued to buy Russian oil and gas.

Credibility of dollar and euro 'destroyed' - Putin

Russian President Vladimir Putin said on Wednesday that Western sanctions against his country have dealt a large blow to public trust in the two major Western currencies. Many US allies have joined together to impose sweeping restrictions on Moscow in response to its ongoing military offensive in Ukraine.

Putin argued that the penalties showed it "makes no sense anymore" to sell Russian goods in the US and the EU while receiving payment in dollars or euros. He said that the ruble will be used for the sale of Russian natural gas to, what Moscow considers to be, "hostile" countries.

"During the last few weeks, as you know, several Western countries adopted unlawful decisions to freeze Russian assets," Putin outlined during a government meeting held via video link. "The West has de facto destroyed the credibility of its currencies."

"The United States and the EU have practically defaulted on their obligations before Russia. Some have suspected this, but now everyone in the world knows that obligations in the [US] dollars and euros can be left unfulfilled. "

Comment: Many knew, some countries had no other option but to wait until the time that the multipolar world came online, others were unscrupulous enough to play both sides: Why the UAE is shrugging off Washington's diktats

Ruble rockets on gas currency switch

The ruble has surged on Wednesday after the announcement that payments for gas exports to certain Western countries will be switched to Russia's domestic currency.

The Russian currency immediately rose to a three-week high of 95 rubles against the dollar, before settling below 100. It also gained 3.5% against the EU's currency, trading at 110.5 rubles per euro.

The ruble plunged to historic lows earlier this month as unprecedented Western sanctions hit the Russian economy, dropping to record lows of 132 rubles per dollar and 147 rubles per euro on March 7. In mid-February, the currency's exchange rate was around 75 rubles per dollar and 85 rubles per euro.