CBR backs govt decisions to lower threshold for forex revenue sales, will "observe" - deputy governor

MOSCOW. Oct 22 (Interfax) - The Central Bank of Russia (CBR) supports decisions made by the government to liberalize the regime for mandatory repatriation and sales of major exporters' forex revenues, but is not commenting on the possibility of further steps in this direction.

"We support decisions made to reduce the threshold and increase timeframes for depositing revenues. This makes cross-border payments easier and reduces the burden on exporters," CBR deputy governor Filipp Gabuniya said in an interview with Interfax.

Mandatory repatriation and sale of forex earnings was introduced by presidential decree in October 2023, and in April 2024 it was extended for a year until April 30, 2025. Exporters were initially required to transfer at least 80% of forex earned on foreign trade contracts to their accounts at authorized banks and sell 90% of this amount on the domestic market. The government reduced this threshold from 80% to 60% at the end of June and then to 40% in July, meaning exporters must sell 36% of forex earnings on the domestic market.

Asked whether this threshold might be lowered again before the decree on mandatory repatriation expires, Gabuniya said "Going forward we will observe. But we don't make such decisions. This is the purview of the government."

He also commented on the setting of the exchange rate on the domestic forex market since exchange trading of the U.S. dollar and euro was suspended in June after the Moscow Exchange Group was hit by sanctions.

"So that everyone would understand how the dollar and euro exchange rates are set after the end of exchange trading, we published the methodology for calculating these rates on our site. In other words, we made this process transparent, it is absolutely not arbitrary. We use an approach similar to what was used in calculating rates based on exchange trading, meaning we determine the average rate weighted by volume. In order to bring the conditions for calculation closer to the exchange market and exclude various anomalies, we factored algorithms into the method for cutting off atypical values. We take data for calculation from bank reporting," Gabuniya said.

"The possibility of wilfully setting a rate that differs from the conditions on the over-the-counter market is eliminated," he added.