Sales of foreign currency earnings important for Russia’s economic stability
Boris Kopeikin recalled that under the sanctions, the Central Bank's reserves in euros and dollars are frozen and cannot be used to reduce exchange rate volatility.
The extension of the requirements for the sale of foreign currency by key exporters until the end of 2024 is an important element of maintaining macroeconomic stability and may create conditions for the Central Bank to lower the key rate, First Deputy General Director of the Center for Strategic Developments Boris Kopeikin told reporters.
"I would like to remind you that in August-September the ruble exchange rate noticeably weakened. Both business and citizens had many concerns about this. From the date of signing the decree of the President of the Russian Federation on the introduction of requirements for the mandatory sale by individual exporters of a portion of foreign currency earnings in October, the ruble exchange rate against the US dollar increased by more than 13%. At the same time, of course, the strengthening of the ruble was also supported by the decisions of the Bank of Russia to increase the key rate. Our exchange rate is floating," Kopeikin said.
He added that maintaining a relatively stable and predictable exchange rate is an important condition for the development of the country's economy, the growth of foreign trade and attracting investment.
The expert recalled that under the sanctions, the Central Bank's reserves in euros and dollars are frozen and cannot be used to reduce exchange rate volatility. Therefore, temporary measures are needed to stabilize the situation, he added.
"The extension of the requirements for the sale of foreign currency by key exporters until the end of 2024 is an important element of maintaining macroeconomic stability. It is important to note that the decision was announced in advance - the previous decision was valid until April. In the future we will refuse the mandatory sale. This was confirmed by Putin in December during his direct line (Q&A session - TASS). This measure will also create conditions for the Bank of Russia to revise the key rate downward," he said.
On January 23, the Russian government announced that it supports the extension of measures on the mandatory sale of foreign currency earnings. First Deputy Prime Minister Andrey Belousov noted that the measures introduced in October last year showed their effectiveness and helped stabilize the situation on the domestic foreign exchange market by achieving a sufficient level of foreign exchange liquidity.
In turn, the Finance Ministry told TASS that the department considers the government’s proposed extension of the decree on the mandatory sale of foreign currency earnings by large exporters grounded and is ready to adjust the mechanism for repatriating earnings if exporters encounter difficulties in implementing it.
On October 11, 2023, the Russian government announced that, in order to stabilize the exchange rate, the sale of foreign currency earnings for a six-month term will be implemented for 43 groups of companies. As a result, beginning October 16, individual Russian exporters must credit at least 80% of all foreign currency received in accordance with the conditions of their export contracts to their accounts in Russian banks within 60 days of receiving funds.
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The extension of the requirements for the sale of foreign currency by key exporters until the end of 2024 is an important element of maintaining macroeconomic stability and may create conditions for the Central Bank to lower the key rate, First Deputy General Director of the Center for Strategic Developments Boris Kopeikin told reporters.
"I would like to remind you that in August-September the ruble exchange rate noticeably weakened. Both business and citizens had many concerns about this. From the date of signing the decree of the President of the Russian Federation on the introduction of requirements for the mandatory sale by individual exporters of a portion of foreign currency earnings in October, the ruble exchange rate against the US dollar increased by more than 13%. At the same time, of course, the strengthening of the ruble was also supported by the decisions of the Bank of Russia to increase the key rate. Our exchange rate is floating," Kopeikin said.
He added that maintaining a relatively stable and predictable exchange rate is an important condition for the development of the country's economy, the growth of foreign trade and attracting investment.
The expert recalled that under the sanctions, the Central Bank's reserves in euros and dollars are frozen and cannot be used to reduce exchange rate volatility. Therefore, temporary measures are needed to stabilize the situation, he added.
"The extension of the requirements for the sale of foreign currency by key exporters until the end of 2024 is an important element of maintaining macroeconomic stability. It is important to note that the decision was announced in advance - the previous decision was valid until April. In the future we will refuse the mandatory sale. This was confirmed by Putin in December during his direct line (Q&A session - TASS). This measure will also create conditions for the Bank of Russia to revise the key rate downward," he said.
On January 23, the Russian government announced that it supports the extension of measures on the mandatory sale of foreign currency earnings. First Deputy Prime Minister Andrey Belousov noted that the measures introduced in October last year showed their effectiveness and helped stabilize the situation on the domestic foreign exchange market by achieving a sufficient level of foreign exchange liquidity.
In turn, the Finance Ministry told TASS that the department considers the government’s proposed extension of the decree on the mandatory sale of foreign currency earnings by large exporters grounded and is ready to adjust the mechanism for repatriating earnings if exporters encounter difficulties in implementing it.
On October 11, 2023, the Russian government announced that, in order to stabilize the exchange rate, the sale of foreign currency earnings for a six-month term will be implemented for 43 groups of companies. As a result, beginning October 16, individual Russian exporters must credit at least 80% of all foreign currency received in accordance with the conditions of their export contracts to their accounts in Russian banks within 60 days of receiving funds.
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