The Bank of Russia will support the ruble with new currency control measures

The Bank of Russia is increasing its surveillance of the biggest exporters.

The ruble could be supported by implementing measures that would decrease capital outflow from the nation.

In 2023, companies with export revenue or average monthly debt on obligations to non-residents exceeding $1 billion will be added to the list of the largest exporters by the Bank of Russia, with information on their assets and liabilities.

The Central Bank has posted a draft instruction for discussion on its website, which would approximately double the list of exporters.

The regulator will not make public the list of exporters sending information; instead, they will inform companies individually if they are included in the list.

The Bank of Russia has also released a draft directive for evaluating regulatory effects, determining the structure, form, timing, and process for submitting data from the biggest exporters.

Particularly, businesses must furnish data not only concerning assets and liabilities in foreign currency, but also concerning balances in ruble accounts in foreign banks, as well as debt in rubles to non-residents.

Draft regulations related to changes to the Federal Law “On Currency Regulation and Currency Control”, which will take effect on March 1, 2024, have been created.

Profinance believes that the Bank of Russia's new regulations in the currency and exchange control sector may help to reduce capital flight from the nation, thus providing support for the ruble.

The Central Bank is taking a hard stance against inflation, having increased the key rate from 7.5% on July to the current 16%. These measures are intended to limit lending, cool the economy, and thus reduce the demand-driven price increases.

On October 11, President Putin signed a decree requiring certain Russian exporting companies to sell their foreign currency earnings. This was in response to the rapid increase in the key rate, which was unable to provide significant support to the ruble, which had weakened this year and caused inflation due to rising prices for imported goods.