Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Russian cenbank: capital controls may have reverse effect long-term, make rouble weaker

Published 11/07/2023, 11:03 AM
Updated 11/07/2023, 11:26 AM
© Reuters. A Russian state flag flies over the Central Bank headquarters in Moscow, Russia, August 15, 2023. A sign reads: "Bank of Russia". REUTERS/Shamil Zhumatov/File photo

MOSCOW (Reuters) -Capital controls on certain Russian exporters that went into force last month may have the opposite of their intended effect in the long term, leading to a weaker and more volatile rouble, the Russian central bank said in a report on Tuesday.

The measure, due to last six months, requires 43 undisclosed exporting firms to deposit with Russian banks no less than 80% of foreign currency earned, and then to sell at least 90% of those proceeds on the domestic market within two weeks.

The rouble has strengthened from beyond 100 to the dollar since that decree was announced. It was trading around 92.3 to the dollar on Tuesday afternoon. The central bank's higher-than-expected hike in its main interest rate, to 15%, in late October has also helped.

The bank also said in its report that it expected annual inflation to start coming down next spring due to Russians' increased savings and higher interest rates.

© Reuters. A Russian state flag flies over the Central Bank headquarters in Moscow, Russia, August 15, 2023. A sign reads:

Annual inflation in Russia is seen at 7.25% in the fourth quarter, compared to 6.00% in the third quarter, according to the bank's assessment.

Russia's gross domestic produce (GDP) is expected to post year-on-year growth of 1.5% in the last quarter of 2023, slowing from 5.1% in the previous quarter.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.