The Central Bank supported the sale of foreign currency earnings by exporters, although it had previously opposed

The requirement for the mandatory sale of foreign currency earnings for 43 groups of companies will contribute to reducing short-term volatility in the foreign exchange market, the Central Bank said. This is how the regulator responded to the corresponding decree president. Previously, the Bank of Russia opposed the introduction of currency restrictions.

“Establishing a requirement for the repatriation and mandatory sale of foreign currency earnings for 43 groups of companies can increase the efficiency of companies’ sales of foreign currency, improve the liquidity situation and contribute to reducing short-term volatility in the market,” the Central Bank said in a commentary (quoted from “Interfax”). According to the regulator, the “targeted nature” of the restriction will preserve “the developed schemes of foreign trade settlements for the majority of participants in foreign trade activities.”

The Central Bank notes that the key factors for the stability of the foreign exchange market are the foreign trade balance and monetary policy aimed at reducing inflation. The regulator recorded an improvement in the “export environment” in the third quarter, which contributed to an increase in export revenue. “Adjusting imports to tightening monetary conditions and increasing the attractiveness of ruble savings for citizens and companies will support the ruble,” the report notes.

The Central Bank has previously repeatedly opposed the introduction of currency restrictions. In early September, Bank of Russia Chairman Elvira Nabiullina statedthat a return to the mandatory sale of foreign currency earnings by exporters will not give the expected effect in stabilizing the ruble exchange rate. Then she advocated raising the key rate in order to stabilize the value of the Russian currency. In mid-September the rate was increased to 13%, but this week the dollar again exceeded 100 rub.

Read more about the decree in the Kommersant article. “Meeting the Currency Commissioners”.

Leonid Uvarchev