The Central Bank sees no reason to extend the mandatory sale of foreign currency earnings

The Central Bank does not see any compelling reason to extend the mandatory sale of foreign currency earnings by exporters, said the head of the regulator, Elvira Nabiullina. According to her, there are more effective measures to stabilize the exchange rate, including increasing the key rate.

“The main effects were from increasing the key rate, from tightening monetary policy, which, let me remind you, we took in a fairly short time – doubling the key rate. It was the increase in the key rate that increased the attractiveness of saving in rubles rather than in foreign currency. And it also restrained the unwinding of the growth spiral for imports,” Ms. Nabiullina said at a press conference (quoted by Interfax).

Elvira Nabiullina noted that the exchange rate in the fourth quarter was also affected by the growth in revenue of Russian exporters. “In August-September, we had an increase in prices for our export goods, and taking into account lags and transportation for payments, this foreign exchange earnings entered the market in the second half of autumn. And we, of course, analyze this data, but, in our opinion, these are fundamental factors that influence the stabilization of the exchange rate,” said the head of the Central Bank.

Requirements for mandatory repatriation of foreign currency and sale of foreign currency proceeds are in effect until April 30, 2024 for 43 groups of companies. The mechanism stipulates that Russian exporters must credit accounts in Russian banks with at least 80% of the currency received and sell at least 90% of the credited proceeds. At the end of January the government stated about plans to extend the measure.

About why exporters continue to hold currency abroad – in the publication “Kommersant” “Dollars accumulated in banks”.