【Russia】Russian Diamonds Return to Market with Deals Conducted in Indian Rupees Instead of US Dollars, Report Says

Editor’s Note

This article, based on Bloomberg sources, reports that Russian diamond miner Alrosa has resumed significant sales—over $250 million monthly—following U.S. sanctions, with a noted shift toward rupee-based transactions. The information highlights ongoing adaptations in global trade flows under current restrictions.

Alrosa Resumes Sales Post-Sanctions

After being hit with US sanctions, Russian mining giant Alrosa is back selling more than $250 million per month in diamonds, sources told Bloomberg.

Shift to Rupee Transactions

Russia accounted for roughly one-third of rough diamond supply globally, but sanctions following Russia’s invasion of Ukraine froze sales. Now, sales are coming back as banks and traders shift transactions away from US dollars to avoid running afoul of sanctions. Alrosa’s diamond sales are now $50 million to $100 million below pre-war levels.

The company has been selling diamonds to buyers in India and Europe who are mostly paying with rupees, according to Bloomberg.

India as Primary Destination

Most of the diamonds are destined for India, where manufacturers distribute the stones to small businesses that cut and polish them while banks feel more comfortable using alternative currencies outside of US dollars.

Deals Kept Under Wraps
“Russia’s renewed diamond sales haven’t violated any sanctions, but the deals are still kept under wraps with Alrosa no longer disclosing any financial information as doing business with Russia attracts unwanted attention,” Bloomberg said.
Market Impact

The return of Russian supplies has also eased tightness in the secondary market for diamonds, with prices coming down recently.

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⏰ Published on: August 23, 2022