this post was submitted on 11 Sep 2023
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Russia says there's a problem with billions of rupees it has in India that need to be converted (markets.businessinsider.com)
submitted 1 year ago by zabadoh@lemmy.ml to c/ukraine@sopuli.xyz
33 comments fedilink hide all child comments
 

Key quotes:

Russia has accumulated billions of rupees that are sitting in Indian banks.

Reuters reported that Russia and India have suspended negotiations over using rupees for trade between the two countries.

Russia prefers to be paid in Chinese yuan, which has become the most-used foreign currency in Russia.

Russia and India remain deadlocked in a currency dispute that has also frozen weapons sales between the two countries.

India won't pay Russia in US dollars over concerns that it may face secondary sanctions and won't pay in rubles because of worries about obtaining Russia's currency on global markets at a fair rate,

Recently, (Russia) agreed to use the (Chinese) yuan to for payments on a nuclear-power plant deal with Bangladesh, after previously insisting on using its ruble.

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[–] zabadoh@lemmy.ml 34 points 1 year ago* (last edited 1 year ago) (1 children)

How indebted are the Russians to the Chinese now.

They're completely at the mercy of the Chinese government which tightly controls the Yuan

They're getting deeper into debt with Chinese banks, borrowing the equivalent of USD$10 billion as of last March, although the article doesn't say what currency the loans are in. Likely USD$.

To put that amount into perspective, Russia's USD$ currency reserves were about $599 billion as of May 2023.

The Chinese economy isn't doing so hot either

And tossing billions into the black hole that is Russia probably won't help those banks stay financially stable.

[–] TonyTonyChopper@mander.xyz 3 points 1 year ago* (last edited 1 year ago) (2 children)

I thought the US had like 20 trillion in debt. 10 billion seems pretty small

[–] Dkarma@lemmy.world 12 points 1 year ago

It's not the amount of the debt it is the ratio of debt to gdp. Russians gdp is not huge.

[–] Astroturfed@lemmy.world 1 points 1 year ago* (last edited 1 year ago)

They're talking about foreign currency reserves. Basically to buy stuff on the global market you need an exchangeable currency that people trade in. This is mostly USD. It's getting increasingly hard for Russia to buy goods internationally because a ton of their foreign currency reserves were seized. Coupled with the fact that no one wants to take their currency now.

The figures the comment you replied to is discussing is the foreign currency reserves. Not debt. A lot of the economic collapses we see these days are because the local currency devalues in USD and they run through their stockpile of USD. Ones this happens they have a real hard to buying anything with their unstable currency no one wants to accept.