INDIA TRIES TO SCREW RUSSIA ON RUPEE CONVERSION

 Here is something interesting. Because of the NATO sanctions Russia has been selling cheap oil to the Indians, sometimes up to a discount of 40% from the market prices.

Plus Russia has been accepting payment for the oil in Indian Rupees (instead of US Dollars). The Russians have been accumulating the Rupees from their oil sales to India in bank accounts maintained in Indian banks.

(The Indians in turn have been re-selling the Russian oil in the world markets at very high profits and they are getting paid in US Dollars. Very clever.)

Now when the Russians want to take out their accumulated Rupees from the Indian banks they are facing 'foreign currency conversion rate issues'. 

This issue sometimes arises where the direct conversion of the Indian Rupee to another currency like the Yuan (China is considered an enemy of India) raises some problems.  

Instead the Indians first calculate the value of the Russian owned Rupees into US Dollars and then calculate again the US Dollar value to the Yuan. There is a double calculation here. From Rupee to USD to Yuan. Instead of a direct conversion from Rupee to Yuan. The 'benchmark' currency is still the USD. 

The Russians will suffer some loss because they have to pay the 'conversion premium' twice. 

This double conversion sometimes happens when you want to change Ringgit (for example) into currencies that are not common in the international market (Rubles, Brazilian money etc). So the benchmark is often the US Dollar.

Or you can change your Ringgit into USD and then travel to Russia or Brazil and then change the USD into the local currency. You still suffer the double conversion risk.

Here is the Russian Foreign Minister Lavrov:

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.