Putin: the Russian budget needs the dollar exchange rate “a little lower”

The Russian federal budget will be satisfied with a slightly stronger ruble exchange rate against world currencies, Russian President Vladimir Putin said at a press conference following his official visit to Bishkek.

“For the budget, we need the exchange rate a little lower. If everything was normal, there would not have been a decree (on the sale of foreign currency earnings by individual exporters – Vedomosti), he said.

The dollar exchange rate against the ruble, the president emphasized, is not associated with any problems in the economy.

“There is nothing like it. Our economy is stable, macroeconomic indicators are predicted to be good for the next six months to a year. The issue is currency regulation,” the president believes.

Russia has abandoned such regulation, but in modern conditions “our economic operators prefer to leave a significant part of foreign currency earnings abroad,” Putin added.

On October 11, it became known that Putin signed a decree on the mandatory sale of proceeds in foreign currency received by individual Russian exporters under foreign trade agreements. The goals of the innovation are to create long-term conditions for increasing the transparency and predictability of the foreign exchange market and reduce the possibility of currency speculation.

The decree defines a specific list of 43 exporters related to the sectors of the fuel and energy complex, ferrous and non-ferrous metallurgy, chemical and forestry industries, and grain farming, which will be affected by these measures. According to the document, mandatory repatriation and sale of foreign currency earnings on the Russian market is introduced for these companies for six months. Kremlin spokesman Dmitry Peskov said on October 12 that the decree of the head of state, as well as the list of exporters obliged to sell foreign currency, would not be published.

Vedomosti sources noted that the decision to resume the mandatory sale of export earnings was due to the fact that the business did not comply with informal agreements on the return of foreign currency earnings. Formally, the agreements were respected, but in practice, due to the lack of transparency of operations, most of the exporters’ income still ended up in foreign currency. This categorically did not suit the authorities, and the exchange rate confidently went above 100 rubles/$.

How reported Central Bank October 13, the real effective exchange rate of the ruble in the first nine months of 2023 decreased by 29.7%, in September it increased by 0.2%. The average nominal exchange rate of the dollar to the ruble for this period was 82.12 rubles, the euro – 89.03 rubles, the yuan – 11.65 rubles.