Cut off from the West, Putin says almost 40% of Russian trade turnover is now in rubles

Russian President Vladimir Putin said Friday that nearly 40% of the country’s trade turnover is now in rubles as the share conducted in dollars, euros and other “non-friendly” Western currencies has fallen away.

Speaking at the St. Petersburg International Economic Forum (SPIEF), Putin said countries “friendly to Russia” were the ones that deserved special attention as they will define the future of the global economy, “and they already make up three-quarters of our trade volume.”

He added that Russia would seek to boost the share of settlements conducted in the currencies of BRICS countries, referring to an economic coalition of emerging markets which includes Brazil, Russia, India, China and South Africa.

Putin said payments for Russian exports in “so-called ‘toxic’ currencies of non-friendly states” had halved over the last year.

“With that, the share of the ruble in import and export operations is increasing, now standing at almost 40%,” Putin said, according to a translation. Reports suggest this is up from roughly 30% a year ago, and higher than the 15% in prewar years.

Russia’s president detailed plans for a major overhaul of the country’s domestic financial market, including plans to double the value of the Russian stock market by the end of the decade, reduce imports and boost investment in fixed assets.

His comments come as the Kremlin leverages SPIEF to court new relationships with countries in Asia, Latin America and Africa.

The West has sought to cut off Russia’s $2 trillion economy in response to Moscow’s full-scale invasion of Ukraine in February 2022. Yet Russia’s economy is expected to grow faster than all advanced economies this year, despite several rounds of international sanctions.

In its World Economic Outlook in April, the International Monetary Fund said it expected Russia to grow 3.2% in 2024, exceeding the predicted 2.7% expansion rate of the U.S. (2.7%). Germany, France and the U.K. are projected to log even lower economic growth of less than 1%.

Russia says that Western sanctions on its critical industries have made it more self-sufficient and that private consumption and domestic investment remain resilient. Ongoing oil and commodity exports to the likes of India and China, as well as alleged sanctions evasion and high oil prices, have allowed Moscow to maintain robust oil export revenues.

Fighting has been raging in Ukraine since Russia launched its full-scale invasion over two years ago, with Moscow’s forces securing tactical advances in the north and northeast of Ukraine in recent weeks.

Western leaders on Thursday marked the 80th anniversary of D-Day by delivering an impassioned rallying cry for the continued support of Ukraine. At the D-Day international commemoration ceremony, U.S. President Joe Biden said it was “simply unthinkable” to bow down to Russia’s aggression, pledging no letup in U.S. support for the Eastern European country.

French President Emmanuel Macron joined Biden in praising Ukrainian forces for their courage in their fight against Russian forces, adding, “We are here and won’t back away.”

Ukrainian President Volodymyr Zelenskyy, who was also in attendance at the ceremony on Omaha Beach, said on social media that the event served as a reminder “of the courage and determination demonstrated in the pursuit of freedom and democracy.”

“Allies defended Europe’s freedom then, and Ukrainians do so now. Unity prevailed then, and true unity can prevail today,” Zelenskyy added.

Earlier in the week, Putin reportedly said Russia could begin supplying long-range weapons to unspecified actors for strikes against the West, in response to the lifting of some Western restrictions on Ukraine’s use of weapons to hit military targets inside Russia.

— CNBC’s Holly Ellyatt contributed to this report.