Bank of Russia admits of interference in FX market in case of financial stability threat
It is noted that it is unreasonable to seriously amend the existing foreign currency restrictions now.
Russia’s Central Bank is still committed to a floating exchange rate and considers interference in the FM market acceptable only in the event of threats to financial stability, the regulator’ Governor Elvira Nabiullina said addressing the State Duma (lower house) on Thursday.
"We are still committed to a floating exchange rate as a very efficient stabilizing factor for the national economy. We only consider it acceptable to interfere in the work of the FX market when the events threaten the financial stability as was the case last spring," she said, adding that it is unreasonable to seriously amend the existing foreign currency restrictions now.
"Last spring tight foreign currency restrictions were imposed. Those restrictions were necessary for stabilizing the FX market in a situation when our reserves were partially frozen, and concurrently, as a retaliatory step to sanctions. Part of restrictions were later weakened or removed. This was first of all absolutely necessary for avoiding the creation of obstacles for Russian companies that needed to quickly and dramatically adjust their international economic activities. Part of restrictions, mainly of retaliatory nature, persist," Nabiullina explained.
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Russia’s Central Bank is still committed to a floating exchange rate and considers interference in the FM market acceptable only in the event of threats to financial stability, the regulator’ Governor Elvira Nabiullina said addressing the State Duma (lower house) on Thursday.
"We are still committed to a floating exchange rate as a very efficient stabilizing factor for the national economy. We only consider it acceptable to interfere in the work of the FX market when the events threaten the financial stability as was the case last spring," she said, adding that it is unreasonable to seriously amend the existing foreign currency restrictions now.
"Last spring tight foreign currency restrictions were imposed. Those restrictions were necessary for stabilizing the FX market in a situation when our reserves were partially frozen, and concurrently, as a retaliatory step to sanctions. Part of restrictions were later weakened or removed. This was first of all absolutely necessary for avoiding the creation of obstacles for Russian companies that needed to quickly and dramatically adjust their international economic activities. Part of restrictions, mainly of retaliatory nature, persist," Nabiullina explained.
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