Russia could reinstate mandatory sales of forex revenue if needed, decree still in effect - ministry

VLADIVOSTOK. Sept 4 (Interfax) - The presidential decree that created the mechanism requiring Russia's largest exporters to repatriate and sell a portion of their forex revenues remains in effect, and if needed the requirement, which was recently reduced to zero, can be changed, the director of financial policy at the Finance Ministry, Alexei Yakovlev said.

The requirement for mandatory repatriation and sale of forex revenue was introduced by decree in October 2023 to ensure the stability of the exchange rate and the Russian financial market. It applies to exporters in the fuel and energy sector, ferrous and nonferrous metals sectors, and the chemical, forestry and grain industries.

The specific requirements under the mechanism are set by the government, which in mid-August issued a resolution to reduce the requirement for repatriation and sale of forex earnings to zero. Prior to this, the largest exporters were required to repatriate at least 40% of forex earned on foreign trade contracts to their accounts at authorized banks, and then sell at least 90% of this forex on the domestic market.

"Repatriation requirements for the largest exporters were introduced in their time to stabilize the exchange rate on the forex market. As we saw, there was systematic over-fulfilment of the requirements that were set by the government for the transfer and sale of forex revenue. But, nonetheless, this guaranteed some stability. We saw the stabilization of the ruble's exchange rate, meaning the mechanism demonstrated its effectiveness," Yakovlev said at the Eastern Economic Forum on Thursday.

"Now these parameters have been reduced to zero. Nonetheless, the infrastructure and the decree itself remain in effect, so if needed these parameters can be reconsidered," Yakovlev said.