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More De-Dollarization: Turkey Looks To Settle Payments With Russia In Local Currencies

Turkey-Russia-FlagsTurkey’s Ministry of Economy is considering a move to settle payments with Russia by using local currencies for major investment deals, Russia’s TASS news agency reports.

“We would like payments in rubles and lira to be introduced at least for the larger investment projects in Russia and Turkey,” Turkey’s Deputy Economy Minister Adnan Yyldyrm, said during a joint Russian-Turkish business council meeting, TASS reports.

Yyldyrm said that Turkey is awaiting Russia’s Ministry of Finance to take reciprocal steps in order to set up a platform for which payments can be settled in rubles and lira.

The report added that both countries are discussing to allow Russian tourists in Turkey to use rubles for payment settlements, according to the Vice President of Russia’s Chamber of Commerce and Industry (RCCI), Georgy Petrov.

In February, Russia’s Sberbank and its Turkish subsidiary Denizbank, announced its plans to settle payments in national currencies.

In late January, Russia and Turkey agreed on the route of the ‘Turkish Stream’ pipeline under the Black Sea. The first pipeline would deliver a capacity of 15.75 billion cubic meters (bcm) of gas to Turkey with another potential 47 bcm to Europe via Greece.

The pipeline is expect to be operational by December 2016.

Trade between the two nations reached $32.7 billion in 2014, which makes Turkey Russia’s eighth largest trading partner, while Russia is Turkey’s second largest trading partner, following the European Union.

Discussion of Turkey joining Russia, Belarus, and Kazakhstan in the newly founded Eurasian Economic Union (EEU) has been floated by both Moscow and Ankara. Turkey has been in the formal Customs Union agreement with the European Union since 1995, but has made little progress in joining the bloc.

The Eurasian Economic Union (EEU) is an economic and political bloc formed in 2014 uniting Russia, Belarus, Kazakhstan, and Armenia. A treaty aiming for the establishment of the EEU was signed on 29 May 2014 and came into force on 1 January 2015. The population of the union is about 171 million people and its gross domestic product is expected to reach $3 trillion next year.

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