Russia, Turkey may use own currencies in bilateral trade: Russian minister

“There is no legal obstacle before Turkey and Russia about using the Turkish Lira and the ruble in our bilateral trade. There are only some practical issues which are needed to be solved. First of all, we need to find a solution to the fluctuations in the Turkish Lira and the ruble, maybe developing an equilibrium point for them. Secondly, we need to reflect upon what the parties will do with each other’s money. We can establish new investment funds for this purpose,” Ulyukaev told daily Hürriyet in an exclusive interview. 

There would be a large number of liras in the hands of Russia if this scenario came online, as the bilateral trade between Turkey and Russia is largely on the behalf of the latter based upon its huge gas exports to the former. 

“The trade transactions and investments therefore need to rely upon each other,” he said. 

Ulyukaev noted Turkey could buy Russian oil and gas upon the lira if this mechanism became available between the two countries. 

“Gazprom should however know what to do with that huge amount of Turkish Liras when the transactions are over. For instance, the company could use this money to bid on the privatization tenders of Turkey’s domestic pipeline systems or to invest in the planned underground gas storage in Turkey,” he said. 

Russian and Turkish companies could boost economic and trade ties with third party countries in an easier way using such a mechanism, he said, adding he planned to talk about this proposal to his Turkish counterpart, Nihat Zeybekci, in their meeting soon in the southern Turkish resort of Antalya.

Ulyukaev also said bilateral trade between the two countries contracted by 4 percent in 2014. 

“The decrease was a direct result of the plunging oil prices from $110 to $47 on our side. On Turkey’s side, the decline in the trade ties was due to the dramatic plummet at the ruble’s value… Actually, Russia experienced the smallest decrease in its trade volume with Turkey, compared to its ties with other countries,” he said. 

Ulyukaev noted around 4.5 million Russians visited Turkey last year, but some decrease should be expected this year due to the economic conditions. 

“I, however, disagree with the most pessimistic forecasts… The ruble has been recovering against the U.S. dollar, enabling our citizens to have higher purchasing power… As the Russian government representatives, we also support several touristic airline companies, such as Utair and Trasaero… I expect the coming summer will be better than many forecasts,” he said.