OREANDA-NEWS  Russia and India have suspended negotiations on the transfer of bilateral trade in rupees, as it is unprofitable for Moscow to accumulate Indian currency, Reuters reported, citing government officials in New Delhi.

"We no longer want to insist on a settlement in rupees, this mechanism simply does not work. India tried everything we could to try to make it work, but it didn't help," one of them said.

Moscow believes, according to another interlocutor, that the annual surplus of rupees in the case of the implementation of the mechanism will exceed $40 billion, and considers such a scenario "undesirable".

Another source said that Russia and India already make some payments in UAE dirhams and several other currencies, but most of them remained in dollars.

The press service of the Ministry of Finance of the Russian Federation told Vedomosti that "productive cooperation has developed between Russia and India in terms of settlements in national currencies."

Vedomosti wrote in February that the imbalance in trade between Russia and India in favor of Moscow caused by the growth of oil exports from the Russian Federation does not allow the rupee to become a popular means of payment. According to bankers and economists, domestic banks are not interested in accumulating rupees on their Vostro Indian accounts (a foreign bank account in a resident bank, they were opened at least by Sberbank, VTB and Gazprombank) due to the specifics of currency conversion, so you need to switch to UAE dirhams for settlements.