Russia Replaces Dollars with Rubles, Local Currency in Defense Deals

Russia has nearly stopped receiving payments in US dollars for defense sales in view of U.S. sanctions against Russian defense entities.

Most of the contracts today are concluded in rubles or national currencies of partner countries. “The share of dollars in our contracts is steadily approaching zero. In addition, we actively use offset mechanisms and countertrade tools, according the general director of Rosoboronexport, Alexander Mikheev said in a report by Tvzvezda.ru, the Russian MoD’s TV channel.

Over the past few years, the Russian Federation has been moving step by step to settlements for export arms contracts in national currencies. In recent years, the volume of Russian arms exports has remained at a stable level - about $ 15 billion a year. The order book is about $ 50 billion.

On the broader economic front, Russia has cut its exposure to the U.S. currency by liquidating most of its Dollar holdings and replacing it with Euro, Yuan and gold assets.

The sanctions also prevent Russian companies from exhibiting at international arms fair such as Eurosatory or Farnborough. Russia has since bolstered its own defense events such as ARMY and MAKS and prefers to announce new developments at these shows.