There is no need to restore capital controls as sanctions pressure has eased, CBR says
The Central Bank of Russia (CBR) does not consider it necessary to revert to the repatriation of export earnings, head of the regulator Elvira Nabiullina said on Wednesday.
According to her, currency controls should protect against the pressure of sanctions, but not interfere with the country’s foreign economic activity. “And that’s the balance we’re looking for,” said Nabiullina.
“As for the need to revert to the repatriation of export earnings and other foreign exchange restrictions, in our opinion, this should not be done. The fact that our companies leave the profits abroad allows them to pay for the necessary imports,” she said, addressing the State Duma.
Nabiullina noted that anti-crisis measures are a powerful “medicine,” but they have Side effects which means that you have to stop using them as soon as you can do without them.
Last year, the Russian government introduced strict controls on capital movements, including the mandatory sale of 80% of foreign exchange earnings, in response to Western sanctions against the country. Exporters were required to sell currency credited to their accounts with approved banks for an amount determined by presidential decree.
In order to expand exporters’ ability to manage foreign exchange liquidity, the CBR then decided to relax the mandatory foreign exchange sale requirement to 50%. The regulator took another step towards liberalizing the monetary regime, removing all restrictions last June.
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