Requirement for Russian exporters to sell foreign currency earnings to be extended through end of 2024- Vedomosti
MOSCOW. April 23 (Interfax) - The requirement for the mandatory sale of foreign currency earnings by exporters will be extended through the end of 2024, the Vedomosti newspaper said, citing two federal officials and sources close to the government and the Russian Union of Industrialists and Entrepreneurs (RSPP).
A decree introducing this requirement was signed by the Russian President in October 2023. Neither the decree's parameters nor a detailed list of companies was disclosed. It was reported that the decree applies to 43 groups of companies. These measures are currently in effect through April 30, 2024.
In accordance with the procedure previously approved by the government, as of October 16, 2023, within 60 days from the date of receipt of funds, companies on the list are required to credit to their accounts in Russian banks at least 80% of all foreign currency received in accordance with the terms of their export contracts. They are also required to sell no less than 90% of the credited foreign exchange earnings (but no less than 50% of the funds received in accordance with each export contract on the domestic market within two weeks, and no more than 30 days from the date of receipt).
The standards for the sale of foreign currency earnings during the extension are expected to remain unchanged, the publication's sources say.
The government publicly announced a proposal to extend the requirement for the mandatory sale of foreign currency earnings through the end of 2024 in January, well before the expiration of last year's decree. First Deputy Prime Minister Andrei Belousov said at the time that the measures were showing their effectiveness in stabilizing the situation on the foreign exchange market. However, the Russian Central Bank opposed it. "At the moment, the Bank of Russia does not see any compelling reason to extend the mandatory sale of foreign currency earnings," the regulator said at the time.
The CBR's position on the temporary nature of this measure was confirmed in March by Chairman Elvira Nabiullina, who said that the Bank of Russia believes that these operations do not have a significant impact on the dynamics of the ruble exchange rate.
Despite the government's January statement, intrigue over the issue of the extension remained. The lack of certainty about the fate of the requirement to sell currency has recently put pressure on the ruble exchange rate, and Interfax sources familiar with the discussion said that there really was no solution yet. An extension was not guaranteed as of January, considering the fact that exporters had been facing serious problems making payments and were forced to use mutual settlement schemes involving importers to do so. The ruble exchange rate, despite the possibility that the decree's requirements may not be fully implemented due to these circumstances, is generally stable, one of the agency's interlocutors said, explaining the logic of those who support abandoning compulsory sales.
Businesses note problems with the sale of foreign currency earnings on time due to difficulties with making payments, a source close to the RSPP told Vedomosti. The need to return currency to Russia limits the ability of companies to make payments to counterparties, for example, for the import of equipment, Vedomosti's source said.