Putin to hold emergency meeting on tightening currency controls – Kommersant
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Russian President Vladimir Putin called an emergency meeting with representatives of the executive branch due to the fact that the increase in the key rate by the Central Bank to 12% did not stop the weakening of the ruble, reports Financial Times (FT) citing two sources familiar with the situation. At the meeting, the president will consider proposals from the Ministry of Finance to strengthen currency control. The meeting, according to the newspaper, should be held today, August 16. Sources Vedomosti also reported an emergency meeting on exchange controls.
According to FT sources, the Ministry of Finance, in particular, proposed oblige Russian exporters to sell up to 80% of their foreign exchange earnings within 90 days after delivery. Companies that do not comply with these requirements will be deprived of state subsidies, the newspaper reports.
Other proposed currency control measures include:
- a ban on the payment of dividends and the issuance of loans to persons located abroad,
- abolition of import subsidies,
- restriction of currency swaps,
- a reduction in the amount of foreign currency that exporters can take out of Russia, the FT’s interlocutors said.
Three sources familiar with the situation said that the only official of the economic bloc who spoke in favor of strengthening foreign exchange controls during the government meeting on August 14 was Finance Minister Anton Siluanov. At the same time, one of the FT’s interlocutors said that only Vladimir Putin makes the final decision.
August 16 Reuters, citing sources reportedthat the Russian authorities are discussing the return of the mandatory sale of foreign exchange earnings to exporters. An unnamed senior source at the agency “hinted” that a return to the sale of foreign exchange earnings is “inevitable”, despite the fact that part of Russia’s export earnings now come in rubles and Indian rupees.
On February 28, 2022, the Ministry of Finance obliged Russian exporters to sell 80% of foreign exchange earnings under all foreign trade agreements. In May of the same year, the rate was reduced to 50%. In June, it was canceled, and the size of the sold share began to be determined by the government commission for the control of foreign investment.
Bloomberg sources the day before reportedthat Russia may partially restore capital controls to stop the fall of the ruble. Interfax sources said that the relevant departments and the Central Bank (CB) are discussing with exporting companies measures to stabilize the ruble exchange rate, including the return of the norm for the mandatory sale of foreign exchange earnings up to 90% of it.
Central Bank August 15 at an extraordinary meeting raised the key rate immediately by 3.5 percentage points, up to 12%. This, as the regulator suggests, is enough for inflation to return to 4% in 2024 in the absence of new shocks. Nevertheless, against the backdrop of the decision of the Central Bank, the dollar returned to growth up to 99 rubles/$.
After yesterday’s message from Bloomberg, the dollar exchange rate fell by 85 kopecks, to 96.81 rubles, the euro – by 1.03 rubles, to 106.02 rubles. Today, the ruble against the dollar opened trading at the level of 96.8 rubles, during the day it rose to 97.4 rubles/$, and as of 15:53 Moscow time the rate is 95.7 rubles/$. The euro exchange rate at this time is declining to 104.53 rubles / €, the yuan is growing to 13.04 rubles.
Details – in the publication “Kommersant” “Go dig”.
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