© Reuters. FILE PHOTO: A view shows the Russian ruble coin in this illustration photo taken March 25, 2021. REUTERS / Maxim Shemetov / Illustration / File Photo
(Reuters) – Russia will relax temporary capital controls to limit the ruble’s fall by allowing individuals to buy foreign currency cash and will also eliminate commissions for buying foreign exchange through banks. brokerage firm, the central bank said on Friday.
The ruble has rebounded on the Moscow Exchange from a record low in March to levels seen before February 24, when Russia began what it called “a special military operation” in Ukraine, as capital controls choke demand for foreign exchange.
The ruble’s rapid recovery has raised concerns about its economic and financial impact as analysts warn that the rouble’s strong and volatile volatility could pose a threat to the country’s revenue. Russia from selling goods abroad for foreign currency.
The central bank said banks will be allowed to sell foreign currency cash to individuals from April 18, but only bills they receive no earlier than April 9.
The central bank is also removing its requirement for banks to limit the difference between the prices they offer to buy and sell foreign exchange. However, banks recommend selling foreign exchange to import-focused companies at an exchange rate no more than two rubles above the market rate.
The central bank said individuals will be allowed to withdraw not only dollars but also euros from their accounts from April 11, but keep the maximum amount that can be withdrawn until September 9 equivalent to 10,000 dollars.
The rapid recovery of the incident has raised doubts about the durability of its benefits. Anyone trying to buy foreign currency online at a bank in Russia or illegally at a currency exchange, or buy goods and services online with a foreign currency will find the actual rate significantly worse.
The central bank also said it would drop a 12% commission on purchases of foreign currency through brokerages, confirming earlier reports by Tinkoff Bank and Alfa Bank.
“We think this decision heralds the end of a notable rally in the ruble,” said CentroCreditBank analysts.
At the beginning of March, when the ruble was falling sharply as the United States and European countries imposed sanctions on Russia for sending troops to Ukraine, the central bank offered a 30% commission on foreign purchases. penance for individuals. The commission was later lowered to 12%.
Restrictions on foreign exchange purchases coupled with orders for export-focused companies to convert 80% of their foreign exchange revenues have helped the ruble regain its footing. On Friday, the ruble touched its strongest level against the euro since June 2020 and surged to a 2022 high against the dollar.
VTB Capital analysts said that the move to eliminate commissions along with the central bank’s decision to cut the prime rate to 17% will reduce the volatility of the ruble.
Russia’s central bank unexpectedly cut its key interest rate from 20% on Friday and said future cuts were possible, as emergency measures averted risks to stability. financial regulation, bringing deposits back to banks and helping to limit the risk of inflation.
In March, consumer prices in Russia increased by 7.61%, marking the largest monthly increase since January 1999.