Russia "UN Fund Contributions Paid in Rubles... Cannot Pay in Dollars Due to Sanctions"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Russia has notified that it will pay its contributions to UN agencies in its national currency, the ruble. It explained that the previous payment method, the US dollar, is no longer feasible due to US and Western sanctions against Russia.

According to AFP on the 2nd (local time), the Russian government announced that it will change the annual payment to the United Nations Population Fund (UNFPA), a UN agency, from US dollars to rubles. Accordingly, the $1,236,321 (approximately 1.765 billion KRW) due this year will be paid in rubles equivalent to the exchange rate at the time of payment.

UNFPA is a UN agency that supports reproductive rights, safe childbirth, and the development of the potential of children and youth. The Russian government explained that the payment will be used to strengthen the collection, analysis, and utilization systems of population data for the member states of the Commonwealth of Independent States (CIS), a former Soviet Union bloc.

Earlier, Pyotr Ilyichev, director of the Department of International Organizations at the Russian Foreign Ministry, stated, "Russia is considering paying its contributions to the UN and its agencies in rubles." Ilyichev claimed, "Due to Western sanctions aimed at restricting the normal operation of Russia’s financial system, we have no choice but to take such measures," adding, "Western sanctions against Russia due to the Ukraine war are the cause of the decision to pay in rubles."

With Russia paying even its UN contributions in its national currency, there is speculation that, as previously announced by the Russian government, the principal and interest repayments to foreign investors who purchased government bonds may also be paid entirely in rubles. Amid economic difficulties caused by sanctions against Russia, it is analyzed that Russia prefers ruble payments to reduce foreign currency expenditures and to emphasize the negative economic impact of Western sanctions.

This content was produced with the assistance of AI translation services.