currency control will not be tightened in Russia yet

The Russian authorities will not yet set standards for the sale of foreign exchange earnings by exporters and introduce restrictions on capital movements to strengthen the ruble exchange rate. “Vedomosti” writes about this with reference to sources close to the government.

According to them, such a decision was made on August 16 at the meeting of the President of Russia Vladimir Putin with the Ministers of Finance and Economic Development – Anton Siluanov and Maxim Reshetnykov, as well as the head of the Central Bank Elvira Nabiullina.

As “Vedomosti” writes, the government managed to informally agree with exporters on increasing the sale of foreign exchange revenue, so it has been decided to limit itself to monitoring. At the same time, one of the publication’s sources noted that the obligatory sale of foreign exchange earnings by exporters will become inevitable if the situation does not change.

The Russian authorities are discussing the possibility of returning the mandatory sale of foreign exchange earnings by exporters in order to stop the fall of the ruble, which has reached 100 rubles per dollar against the background of the ongoing year and a half war with Ukraine, Bloomberg and Reuters reported the day before with reference to several sources.

According to sources from the Financial Times, one of the proposals being discussed is to oblige Russian exporters to sell up to 80% of their revenue in foreign currency within 90 days after delivery. Companies that ignore this requirement will be left with state subsidies.

On August 15, against the background of the collapse of the ruble, the Bank of Russia raised the key rate to 12% per annum, but this did not stop the weakening of the ruble. Over the past hour, the ruble has fallen by more than 40% against the dollar.

Experts believe that the ruble is weakening due to the fact that there is not enough currency on the domestic market due to reduced export revenue. At the same time, there is demand for currency from importers and large businesses.

Mandatory sale of currency revenue was introduced shortly after Russia’s attack on Ukraine in order to stabilize the financial situation when large-scale Western sanctions were imposed against Russia. Later it was canceled.