Russia may bring back capital controls – Bloomberg

Russian authorities are considering partial capital control measures to stem the ruble’s slide, Bloomberg has reported, citing four unnamed sources familiar with the discussions.

The proposal to mandate sales of export revenues was reportedly debated between the government and exporters on Monday with no breakthrough reached. Another meeting was set to take place later this week. 

On Monday, the ruble sank to a 16-month low against major currencies, reaching 101 versus the US dollar, and 111 against the euro. The Russian currency strengthened after the central bank hiked the key interest rate to 12% from 8.5% on Tuesday. 

Last year, the Russian authorities introduced strict controls on capital movement, including the mandatory sale of 80% of forex earnings, in response to Ukraine-related sanctions introduced against the country by the West. Exporters were required to sell foreign currency credited to their accounts with authorized banks in the amount determined by a presidential decree. 

In order to expand the ability of exporters to manage foreign currency liquidity, the CBR later decided to ease the requirement for the mandatory sale of foreign currency to 50%. The regulator took more steps toward liberalizing the currency regime, scrapping all the restrictions. 

The ruble was trading below 95 to the dollar and 103 to the euro at 6:30pm local time in Moscow on Wednesday.

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