Russia on Saturday said it would require major exporters to carry on converting the bulk of their foreign currency earnings into rubles for another year to help support the national currency.
Moscow has used strict capital controls to prop up the value of the ruble in the two years since the West levelled sweeping financial sanctions in response to Russia’s military offensive on Ukraine.
The Russian government said Saturday it had agreed to extend rules requiring 43 major Russian commodities groups to convert at least 80 percent of their foreign currency earnings into rubles until the end of April 2025.
“The decision will contribute to maintaining the stability of the exchange rate and the resilience of the Russian financial market,” it said in a statement.
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Russia first introduced forced foreign currency sales in February 2022.
That was soon after the West froze around $300 billion of Russia’s international reserves and effectively banned its major banks from trading internationally.
By boosting demand for the Russian ruble at a time of intense economic uncertainty, the measures helped avert a run on the currency and major financial crisis.
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Moscow had gradually relaxed the rules throughout 2022 and 2023.
But after a bout of fresh volatility which saw the currency plunge past 100 to the US dollar, Russian President Vladimir Putin reintroduced the mandatory FX sales last October for six months.
“The measure has proved its effectiveness,” the government said Saturday.
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“It helped stabilise the situation in the domestic foreign exchange market by providing a sufficient level of liquidity.”
The ruble is currently trading at about 93 to the dollar.
The government said Saturday it would loosen the time-frame in which the companies must convert their foreign earnings from 90 to 120 days.
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