Turkey to pay for Russian S-400s in rubles or lira: Erdogan

Istanbul: Turkey will pay in rubles or lira, rather than dollars, for its major order of Russian S-400 missile defence systems that has troubled Ankara's Western allies, President Recep Tayyip Erdogan said on Thursday.

Erdogan said the final currency composition had yet to be agreed but confirmed he expected the deliveries of the systems to take place in 2019.

His comments came a day after Putin said that Russia was cutting its dependency on dollars in international trade due to increasingly tough US sanctions.

Turkey is also looking to do the same after the lira plunged in value on financial markets over the summer, although it has recovered in the last month.

"We always had this principle -- that we would do this deal using local money," Erdogan told reporters in Istanbul before leaving for the G20 summit in Argentina where he is expected to hold talks with Russian President Vladimir Putin.

"So in the end we agreed that it would either be in rubles or Turkish lira," he said.

But he added: "But I know that the work of our central banks has still not reached the final point. We have around a year to go. God willing, these deliveries will be made towards the end of 2019."

Putin said on Wednesday that while "it isn't our goal to desert the dollar... the dollar is deserting us."

Putin noted dollars did not feature in the S-400 deal with Turkey and Deputy Prime Minister Yuri Borisov recently said Moscow's key defence client India will also pay for a similar order of S-400s in rubles.

The S-400 order is seen as one of the key symbols of NATO member Turkey's flourishing relationship with Russia under Erdogan and Putin.

The order has raised questions among NATO allies over the systems' compatibility with NATO equipment and also the broader implications for Turkey's future strategic orientation.

President Donald Trump in August signed a defence authorisation act that could prohibit the delivery of F-35 stealth aircraft to Turkey if it goes ahead with the purchase of the S-400, which can shoot down missiles as well as aircraft.

According to Russian media, Turkey is buying four S-400 systems in a contract worth a total of USD 2.5 billion.