Russian govt reduces mandatory repatriation, foreign currency sales requirements for exporters to zero
MOSCOW. Aug 14 (Interfax) - The mandatory repatriation and foreign currency sales requirements for Russian exporters have been reduced to zero, and Prime Minister Mikhail Mishustin has signed the corresponding decree, the government's press service said.
The decree is dated August 14.
The decision was made in light of the strengthening and stabilization of the ruble exchange rate as well as the absence of foreign currency liquidity issues, the press service said.
Major Russian exporters were required to deposit at least 40% of foreign currency received under foreign trade contracts into authorized bank accounts and sell at least 90% of deposited currency on the domestic market.
The mandatory repatriation and currency sales requirement was introduced by presidential decree in October 2023 to ensure the exchange rate's stability and the resilience of Russia's financial market. It applied to exporters operating in fuel and energy, ferrous and non-ferrous metallurgy, the chemical and timber industries and grain farming.
In 2023, mandatory repatriation and the sale of part of foreign currency earnings were introduced for six months, and later the decree was extended for a year, until the end of April 2025. On May 22 this year, the prime minister signed a decree extending this requirement until April 30, 2026. At the same time, the basic parameters of the regime regarding repatriation and sale norms remained unchanged, although there were reports citing sources that, alongside the latest extension, discussions were underway about reducing the requirements for mandatory repatriation and the sale of foreign currency earnings to zero.
Initially, exporters were required to deposit at least 80% of foreign currency received under foreign trade contracts into their accounts in authorized banks and sell 90% of this amount on the domestic market. In June 2024, the government announced a reduction in the threshold from 80% to 60%, and in July reduced it to 40%, meaning exporters were obligated to sell 36% of their foreign currency earnings on the market.
In July, the head of Rosfinmonitoring, Yury Chikhanchin, said that exporters were exceeding the established requirements for the level of foreign currency earnings sales, selling around 70% of them.
Previously, Central Bank of Russia Governor Elvira Nabiullina said that, in the regulator's opinion, extending or not extending the decree did not affect exchange rate dynamics because exporters sell foreign currency earnings above the established requirements.
"We see this in practice: regardless of how the requirements for mandatory foreign currency earnings sales changed last year, on average, our exporters sold up to 85% of their foreign currency earnings. Now, based on two months [January-February], we see that around 90% of foreign currency earnings are being sold, even though the sales norms are much lower. That's why this factor simply wasn't considered [when updating the Central Bank's macroeconomic forecast]," Nabiullina said.
Deputy Finance Minister Alexei Moiseyev, commenting on the discussions about the extension, said that the Finance Ministry sees no need to adjust the basic parameters. Even the current norms are being exceeded by exporters with a margin, and the trend towards a stronger ruble is not related to the decree, he said.
