India refuses to pay Russian oil suppliers in yuan, Why Russia does not want to trade in Rupee?

[beijingwalker]

India refuses to pay Russian oil suppliers in yuan, Why Russia does not want to trade in Rupee?
20 Oct 2023, 09:59 AM IST

India has rejected demands of Russian oil companies for payment in yuan amid tension with China. According to a report by the Bloomberg news agency, some Russian oil suppliers are demanding payment in Chinese currency from India. However, Prime Minister Narendra Modi's government has rejected the request for transaction in yuan.

Indian Oil Corp., the biggest state refiner, had made a yuan payment for Russian crude in the past, although the Modi government has since clamped down on that. Since 70% of India's refiners are government-owned, therefore, they will also stop a payment in Yuan in an attempt to follow orders on payment instructions from the Ministry of Finance.

Indian refiners mostly pay for Russian oil imports in dirhams (UAE currency), US dollars, and a small amount of rupees, if oil prices are above the $60 a barrel cap imposed by the US and its allies on Russian oil.

While the yuan is sometimes used in smaller transactions, Russian oil suppliers are requesting that the Chinese currency be the main unit of transaction for oil trade.

As per the Bloomberg agency report, Russia's demand for yuan has grown sharply in the past year as the economy becomes more reliant on China for imports.

Russian businesses have been settling more of their trade in yuan, with the Chinese currency this year replacing the dollar as the most traded currency in Russia.

An executive from an Indian oil refiner told Bloomberg that payment for about four to five cargoes had recently been delayed because the parties involved failed to agree on the currency of exchange.

India’s resistance to transacting in yuan underscores its difficulty in balancing relations between Russia, an important economic ally, and China, a geopolitical rival. Russia is now the top crude supplier to India, making up almost half of the South Asian nation’s purchases.

Simultaneously, India's relations with China have remained strained due to the border disputes between the two nations. Popularising the yuan at the expense of the rupee also hurts India’s own efforts to internationalize its currency.

Russia--India's top oil supplier​

Russia was India's largest oil supplier with imports worth $4.15 billion.

India’s total oil import bill during the month rose 28.27% to $11.49 billion from $8.96 billion in July.

Imports from Iraq and Saudi Arabia were valued at $2.33 billion and $2.07 billion in August this year.

Russia has emerged the largest supplier of oil to India in the past 20 months with offers of discounted oil amid sanctions from the West.

In FY22, Russian oil accounted for only 2% of India’s total oil imports; in FY23, it made up around one-fourth of the 235.52 million tonnes of crude oil imported by India.

Why Russia does not want to trade in Rupee?

Russia has accumulated billions of dollars worth of rupee assets given its wide trade surplus with India, but it’s struggling to use the funds. The rupee isn’t a fully convertible currency internationally, making it difficult to use in global trade.

In May this year, Russian Foreign Minister Sergei Lavrov said that the build-up of rupees is a “problem" and discussions were taking place on how the funds can be transferred into another currency.

India refuses to pay Russian oil suppliers in yuan

India is rejecting pressure from Russian oil suppliers to pay for crude imports in the Chinese currency

www.livemint.com

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[beijingwalker]

Russians found rupees are worth nothing more than firewood burned to get warm in winter.

 

[etylo]

So, Russia get paid by India with piles of Rupees paper that can't buy any useful commercial products in the world literally, are Russians fools to accept Rupees ?

 

[beijingwalker]

So, Russia get paid by India with piles of Rupees paper that can't buy any useful commercial products in the world literally, are Russians fools to accept Rupees ?

A good gesture which went too far. Now Russians are trying to mend this mistake.

 

[kankan326]

Russia deserves Indian treatment.

 

[One_Nation]

What I got from an earlier news is that Russia was desperate to sell oil and get as much cash as possible but found after the trade that there is no use of rupees. Their rupees are sitting in an Indian bank.

 

[Ali_Baba]

A good gesture which went too far. Now Russians are trying to mend this mistake.

agree - given chinas manufacturing - they can use yuan to buy real things they need - that is not the case with the rupee ...

 

[TriptiD]

Lol, what a pointless conversation. The rupee and yuan are both liquid currencies. The Russians can always sell rupees or dollars to buy yuan if needed.

 

[_killuminati_]

Pretty obvious really. Russia can't buy fuc all with the Rupee. India isn't a major exporter of anything useful, where as China is, and the Yuan can buy a lot of useful things from the world's largest exporter.

Same with the Dirham possibly.

Lol, what a pointless conversation. The rupee and yuan are both liquid currencies. The Russians can always sell rupees or dollars to buy yuan if needed.

But who in their right mind would wanna buy the rupee? It's not as liquid as other currencies, nor does it have any use other than purchasing from the indian market, a market which isn't a seller of a whole lot.

 

[PakAlp]

SCO needs its own currency and SWIFT system, Yuan is good for reserve currency or create a joint one.

 

[TriptiD]

But who in their right mind would wanna buy the rupee? It's not as liquid as other currencies, nor does it have any use other than purchasing from the indian market, a market which isn't a seller of a whole lot.

Lol, you seem to have no idea how the forex market works. Most of the trading is done by market makers and not by end users. The typical buyer of the rupee would be Citibank/JP Morgan/Deutsche Bank/State Bank of India/ ICICI Bank. Both the USDINR and USDCNY crosses are very liquid and will facilitate INRCNY at a tight spread.

 

[TriptiD]

SCO needs its own currency and SWIFT system, Yuan is good for reserve currency or create a joint one.

SCO is not a tight knit common economic zone like the European monetary union. Not even the policy makers at the SCO are considering a common currency. It reflects utter economic illiteracy to suggest it. India will never accept yuan as the common currency for its trade with SCO countries, though it might agree to mutual trade in INR and CNY between India and China.

 

[Raj-Hindustani]

Most people here giving their comments on rupees, they cleary don't have any idea about international forex market.

 

[mmr]

India refuses to pay Russian oil suppliers in yuan, Why Russia does not want to trade in Rupee?
20 Oct 2023, 09:59 AM IST

India has rejected demands of Russian oil companies for payment in yuan amid tension with China. According to a report by the Bloomberg news agency, some Russian oil suppliers are demanding payment in Chinese currency from India. However, Prime Minister Narendra Modi's government has rejected the request for transaction in yuan.

Indian Oil Corp., the biggest state refiner, had made a yuan payment for Russian crude in the past, although the Modi government has since clamped down on that. Since 70% of India's refiners are government-owned, therefore, they will also stop a payment in Yuan in an attempt to follow orders on payment instructions from the Ministry of Finance.

Indian refiners mostly pay for Russian oil imports in dirhams (UAE currency), US dollars, and a small amount of rupees, if oil prices are above the $60 a barrel cap imposed by the US and its allies on Russian oil.

While the yuan is sometimes used in smaller transactions, Russian oil suppliers are requesting that the Chinese currency be the main unit of transaction for oil trade.

As per the Bloomberg agency report, Russia's demand for yuan has grown sharply in the past year as the economy becomes more reliant on China for imports.

Russian businesses have been settling more of their trade in yuan, with the Chinese currency this year replacing the dollar as the most traded currency in Russia.

An executive from an Indian oil refiner told Bloomberg that payment for about four to five cargoes had recently been delayed because the parties involved failed to agree on the currency of exchange.

India’s resistance to transacting in yuan underscores its difficulty in balancing relations between Russia, an important economic ally, and China, a geopolitical rival. Russia is now the top crude supplier to India, making up almost half of the South Asian nation’s purchases.

Simultaneously, India's relations with China have remained strained due to the border disputes between the two nations. Popularising the yuan at the expense of the rupee also hurts India’s own efforts to internationalize its currency.

Russia--India's top oil supplier​

Russia was India's largest oil supplier with imports worth $4.15 billion.

India’s total oil import bill during the month rose 28.27% to $11.49 billion from $8.96 billion in July.

Imports from Iraq and Saudi Arabia were valued at $2.33 billion and $2.07 billion in August this year.

Russia has emerged the largest supplier of oil to India in the past 20 months with offers of discounted oil amid sanctions from the West.

In FY22, Russian oil accounted for only 2% of India’s total oil imports; in FY23, it made up around one-fourth of the 235.52 million tonnes of crude oil imported by India.

Why Russia does not want to trade in Rupee?

Russia has accumulated billions of dollars worth of rupee assets given its wide trade surplus with India, but it’s struggling to use the funds. The rupee isn’t a fully convertible currency internationally, making it difficult to use in global trade.

In May this year, Russian Foreign Minister Sergei Lavrov said that the build-up of rupees is a “problem" and discussions were taking place on how the funds can be transferred into another currency.

India refuses to pay Russian oil suppliers in yuan

India is rejecting pressure from Russian oil suppliers to pay for crude imports in the Chinese currency

www.livemint.com

​

They can buy cow dung from Indians lol

Russia deserves it though…instead of getting fine European goods they are ending up shit load useless toilet papers ha ha

 

[Menthol]

India is always seeing China as a rival.

If China does something, India wants it too.

So does with this Yuan and Ruppe.


The problem with India, India doesn't know anything.

India is over simplified everything.


There's a believe that China economy is strong and becomes world factory is because of the West investment, especially USA.

India thinks if India able to become the major destination of the West investment, India will become another China.

The same with Yuan goes international.

It's just a matter of using local currency instead of all the complexity behind it.


India lacks of hardworking attitude.

To win, India is using lies and deception instead of hard working.

As usual.

In hope everybody is stupid enough and easily being fooled by Indian smartness.


One day, India will become the cleanest country in the world. But it's not Indian who cleaning it, but you and all people around the world.

You think you are going to be paid handsomely by India, nope. You need to pay to clean Indian cities.

Yes, Indian is very smart.