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Efforts to increase trade in rubles, lira between Turkey, Russia on the rise

Compiled from wire services ECONOMY
Published November 14,2018

Turkey and Russia can protect their firms and become independent from the actions of third countries by using national currencies in bilateral trade, the Russian Trade and Industry Deputy Minister Alexei Gruzdev said.

Gruzdev said the use of local currencies in trade between the two countries is necessary.

Russia welcomes initiatives for the use of national currencies in trade with Turkey, Gruzdev noted, adding that Turkish and Russian institutions and companies have intensified initiatives to increase trade with rubles and lira.

"In particular, using our national currencies under current conditions will increase our mutual trade. By using our national currencies, we can protect our institutions and become independent of the decisions of third countries. We should make the mechanism of using ruble and lira more popular in our trade. If we increase this exchange between our banks, our companies will realize the advantage of this method and increase their usage," Gruzdev explained.

In early October, it was reported that Turkey agreed to purchase 30,000 tons of high-protein wheat from Russia and was to pay in rubles.

Russian car manufacturers also said they were preparing to switch to national currencies for payments to Turkey for supplies of components, the Russian Industry and Trade Minister Denis Manturov had said.

The moves came after President Recep Tayyip Erdoğan recently announced that Turkey will increase the use of national currencies in trade transactions with important commercial partners like Russia.

Erdoğan's initiative was welcomed by Russian President Vladimir Putin, who highlighted that the use of local currencies in bilateral trade with Turkey will mitigate the impacts of currency volatility.

The sanction policies by the U.S., particularly related to Turkey, Iran and Russia, have recently sent the national currencies of these three countries to historic lows, thus the emergence of the need to look for alternative mediums for financial transactions that can decrease the domination of the dollar in global trade.

After the Tehran summit on Sept. 7, Turkey, Russia and Iran agreed to use their local currencies for trade between the three countries.

Gruzdev said that Russia agreed with Turkish counterparts on the "Foreign Trade Action Plan."

With such a plan, he said, national interests of both countries would be looked after. "We can achieve good results in a more rapid way in the future."

Recalling that Turkish companies are successfully represented in Russia, particularly in the food, textile and construction sectors, Gruzdev said, "We are now talking about a new level in bilateral trade. This level, for example, is not only the delivery of raw materials or finished products in

textiles, but also diversification along with modern equipment and procurement of technologies or training."

Gruzdev also underscored that the collaboration between the two countries should be increased in the civilian shipbuilding sector. "[The] shipbuilding sector is in a very strong position in

both Turkey and Russia and we see significant potential in this area. We can develop new competencies through joint ventures in areas we do not compete."