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Peter Davis

An writer at FOMOdrive

  • Sep 23, 2023
  • 2 min read

The Russian Ministry of Finance warned speculators about new currency control measures

After the government declared new currency control measures, the ruble experienced a strengthening.

On Wednesday, the dollar exchange rate dropped 0.7%, settling at 96.15 rubles per dollar.

The Bank of Russia has expressed its opposition to any restrictions on capital movements.

Alexei Moiseev, Deputy Minister of Finance of the Russian Federation, stated on Wednesday at an extended meeting of the State Duma Committee on the Financial Market that the government is discussing a variety of measures to reinstate foreign exchange control, as reported by RBC.

Moiseev stated that currently, various measures have been created and are being discussed to reinstate some currency control regulations. He declined to name them as the measures are still being deliberated and it is uncertain which of them will be put into effect.

He stated that these measures are intended to reduce capital outflows that are currently going through friendly countries, and they should be able to control short-term exchange rate changes.

The Bank of Russia was against the implementation of additional limitations on capital flows.

Alexei Zabotkin, Deputy Chairman of the Central Bank, stated in the State Duma that, in general, they do not favor the reinforcement of restrictions on capital movement. He believes that the restrictions that are still in place are only kept in response to the sanctions imposed on them.

At a joint conference on September 1, Anton Siluanov (head of the Ministry of Finance) and Elvira Nabiullina (chairman of the Central Bank) did not come to an agreement regarding currency control measures.

The head of the Central Bank has stated that the Ministry of Finance's apprehension of capital outflow must be addressed with different approaches, such as altering the key rate.

The Ministry of Finance last week proposed making it mandatory for exporters to repatriate their foreign currency earnings, while earlier, VTB head Andrei Kostin suggested closing loopholes for transferring money abroad in order to bolster the ruble, particularly focusing on transfers in rubles.

Generally, the balance of factors is currently in favor of the ruble. High oil prices, currency sales by the Central Bank and exporters, the upcoming peak of the tax period and the end of the holiday season are all working in the ruble's favor, according to BCS. However, a new wave of ruble weakening may start once the peak of exporters' fiscal payments has passed.

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