Rupee-Ruble Payment Pact Reportedly Suspended

Negotiations between India and Russia on a rupee-ruble payment mechanism have stalled after a year of talks, anonymous officials from the Indian finance ministry have told Reuters.

Russia reportedly does not want a surplus of rupees in its coffers, which stands to reach the equivalent of over $40 billion this year, because of the growing trade imbalance between the two countries. However, an unnamed Russian official cited by the Indian news agency ANI dismissed the claims, dubbing them “wishful thinking” by Western media.

Another reason for the reported suspension of talks is the tedious and expensive currency conversion process. Since the rupee is not fully convertible, the double conversion charges can reach up to 3% of the total transaction value.