Decision to further relax threshold for repatriation of export revenue 'effective in current situation' - Russian dep PM
GROZNY July 16 (Interfax) - The decision to further relax the threshold for the repatriation of export proceeds less than a month after it was last lowered is effective in the current conditions, Deputy Russian Prime Minister Alexander Novak said.
Exporters were previously obligated to deposit in their accounts in authorized banks at least 80% of the currency earnings received from foreign trade contracts. In late June, the government announced a reduction of this threshold to 60%. Now this threshold has been reduced to 40%, that is, exporters will be obligated to repatriate less than half of their external earnings. "The decision was made with regard for stabilization of the national currency rate and the achievement of a sufficient level of forex liquidity," the government press service said.
"We just reached a decision with the government to lower [the threshold] from 60% to 40%. So this is the only decision that there is for now and which is, in our opinion, effective in the current situation," Novak told reporters on the sidelines of the Caucasus Investment Forum, when asked about any possible new steps in this direction.
The requirement for mandatory repatriation of currency and sale of foreign currency proceeds was introduced by presidential decree in October 2023. After a difficult discussion in April, when the Bank of Russia traditionally opposed mandatory sale, the measure was extended, and not until the end of the year as was initially planned, but for one year, until April 30, 2025.
Some of the requirements were relaxed after prolongation (for example, the timeframe for crediting foreign currency earnings to the accounts by exporters was increased from 90 to 120 days from the date of the transfer of goods to non-residents, and performing work and providing services for them in accordance with foreign trade contracts). The authorities did not change the main thresholds then (the requirement to deposit at least 80% of the earnings and sell at least 90% of this volume).
The requirement applies to 43 groups of companies operating in the fuel and energy complex, ferrous and non-ferrous metallurgy, chemical and forestry industries, and grain farming. Supporting the need to extend mandatory sale of currency earnings, the government said it had proved effective in stabilizing the situation on the forex market. Russian Central Bank Governor Elvira Nabiullina has said more than once mandatory sale does not have a significant influence on the dynamics of the ruble rate and is more of a psychological factor. "As for the mandatory sale of foreign currency earnings, we believe that the importance of this measure for markets is secondary. Rather, it has a psychological significance for some economic entities that do not analyze trade balances," she said.
Nabiullina said the Central Bank expects that if the requirement is extended, the rigidity of its obligations will be gradually weakened. "If the decision [on extending the mandatory sale obligation] is made, then we expect that the strictness of the requirements themselves will gradually weaken, and there will be a greater understanding that it is market factors that are at work here," she said.
Analysts believed that the strengthening of the ruble on the first days after the introduction of U.S. sanctions against the Moscow Exchange and the termination of exchange trading of dollars and euros in Russia might cause the authorities to adjust the mandatory selling of export earnings regime.
