Page 17 - AsianOil Week 11 2023

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India uses SWIFT system for Russia. Indian refiners have been paying and Rosneft, are seeking non-dollar
Russian companies, such as Gazprom
for most of their Russian oil purchased
dollar trade with Russia via Dubai-based traders in United Arab payments for niche grades of Russian oil, as
well as MTS, which facilitates some Indian
Emirates dirhams instead of US dollars. The
According to an anonymous Indian trade Ministry of Trade and Finance in India did oil non-dollar payments. Although the sales
official, many Indian companies are now not immediately respond to a request for of Russian oil to India through non-dollar
using the SWIFT global payment system comment. currencies represent only a small share
to settle dollar payments with Russia. This of Russia's total sales to India, the trend
is because many Russian banks, including could continue, with Russia seeking to de-
Sberbank and VTB, are blocked from India-Russia oil deals dollarise its economy and traders to avoid
the payments network due to sanctions sanctions. As payments were blocked or
imposed by Western nations in response to undermine dollar’s dominance delayed, even if they were not violating any
Moscow’s invasion of Ukraine in February sanctions, due to overly zealous compliance,
last year. The use of SWIFT makes it easier The sanctions imposed on Russia by dollars became potentially a "toxic asset" for
for Indian traders to do business with Western countries have begun to erode the Russian firms.
their Russian counterparts as the system US dollar's long-standing dominance in The IMF deputy managing director, Gita
underpins financial transactions globally. international oil trade, as deals with India Gopinath, said that sanctions on Russia
However, the official did not reveal which have been settled in currencies other than could erode the dollar's dominance by
banks Indian traders were using to make the dollar, such as the United Arab Emirates encouraging smaller trading blocs using
dollar payments. dirham or Russian rouble. India, the world's other currencies. The tension between
India's Russian imports increased to third-largest importer of oil, shifted to other China and the West is also eroding the
$41.56 billion from $8.54 billion in the April currencies as a response to the sanctions long-established norms of dollar-dominated
2022 to February 2023 period, according to and the Ukraine war. The move away from global trade. Russia holds a chunk of its
data released by the Indian government on the dollar is the strongest evidence so far currency reserves in renminbi while China
Wednesday. Last month, data showed that of a shift that could prove lasting. While has reduced its holdings of dollars, and
India's Russian oil imports had reached a paying for oil in dollars has been the Russian President Vladimir Putin said in
record 1.4 million barrels per day (bpd) in nearly universal practice for decades, the September Moscow had agreed to sell gas
January, up 9.2% from December. Since the currency's share of overall international supplies to China for yuan and roubles
war in February last year, India has been payments is much smaller at 40%, according instead of dollars. ™
using various currencies, including dollars, to January figures from payment system
euros, and dirhams, to settle trade with SWIFT.

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