MOSCOW (Reuters) – The Russian government has eased requirements for mandatory foreign currency sales for exporters if more than half the value of their contracts is paid in rubles, according to changes to a government decree.
President Vladimir Putin signed a decree in October reimposing capital controls, affecting dozens of companies in the fuel, energy, metals, chemicals, timber and grain sectors in order to support the ruble.
The Russian currency has been under pressure from capital outflows and limited supply of foreign currency. In April, capital controls measures were extended for a year.
Some Russian exporters were required to deposit at least 80% of their foreign currency earnings with Russian banks and then sell at least 90% of those earnings on the local market within two weeks.
Under changes in a government decree, signed on May 30, the State Committee on Foreign Investments may drop foreign currency sales requirements for companies if more than half the value of their foreign contracts is settled in rubles.
The central bank has long expressed doubts about the effectiveness of controls, and has publicly disagreed with the government on the issue.
The controls were imposed as the ruble fell below the level of 100 against the dollar and the authorities sought to regain control of the foreign exchange market. The ruble is now trading near $90 to the dollar.
The government said the controls reduce the risk of the ruble devaluing. The central bank believes that higher interest rates of 16% and strong export earnings were more influential in supporting the ruble.