CBR considering possibility of making FX sales by exporters more flexible - Nabiullina
MOSCOW. April 18 (Interfax) - The Central Bank of Russia (CBR) is ready to carefully lift the restrictions it put in place at the end of February and, in particular, is considering the possibility of making the sale of FX revenues by exporters more flexible, CBR Governor Elvira Nabiullina said at a joint meeting of parliamentary committees in the State Duma on Monday.
"There was a requirement for the mandatory sale of 80% of FX revenues by exporters. At the first stage, our restrictions were stricter, now we are carefully lifting some of them, such as the commission for buying currency through brokers, and we are easing some of them. We are considering the possibility of making the sale of revenues by exporters more flexible," she said.
"In so doing, we are responding promptly to the level of risks and gradually reducing barriers for enterprises to participate in foreign economic activities as they stabilize," Nabiullina said.
"About currency restrictions, yes, we are ready to look at this now, maybe soften something, including for non-resource exports," Nabiullina said.
She recalled that the Central Bank has already eased some currency controls, but is still acting carefully, as the situation is volatile.
"We will not be able to abandon all elements of currency control in the near future. But it should be adjusted so that it only covers risks, but does not interfere with normal foreign economic activity. This will require a non-standard approach," the CBR head said.
Nabiullina also said that inflation exceeding target indicators will largely be due not to high demand, but low supply, so the Central Bank will not seek to return it to the target at any cost, as this will prevent businesses from adapting.
"But the period when the economy can live on reserves is finite. And as early as Q2 - early Q3 we will enter a period of structural transformation, a search for new business models. As a central bank, we are well aware that this period will be accompanied by a surge in prices of certain goods. Therefore, inflation will exceed the target. But we need to understand that such inflation exceeding the target will be largely due not to high demand, but precisely to the limitations on the supply side of goods, with low supply. Therefore, we will not try to return it below target at any cost - this would hinder adaptation by businesses, for which it is now harder and more expensive to restore the supply of necessary imported components, and this will inevitably affect the price of end products," Nabiullina said.
"And we definitely need to go through this period of adaptation. But at the same time, inflation should not be uncontrollable, which depreciates people's savings and income. Therefore, we will conduct a monetary policy that will bring inflation back to target within a reasonable, foreseeable time, but not too sharply. We expect to return to 4% in 2024," she said.
According to Nabiullina, the Russian economy will enter a period of structural transformation and the search for new business models in Q2-3 2022.
"The period when the economy can survive on stocks is finite. As early as the second and beginning of the third quarter we will enter an active period of structural transformation, the search for new business models for many enterprises. This period will be accompanied by a surge in prices for some goods, and inflation will be above target," Nabiullina said.
She said restrictions on imports and logistics would mean Russian manufacturers having to look for new partners and new logistical means to deliver products, and switching to producing other goods. The situation is the same with exports: there it will also be necessary to look for new partners and logistics. It will take some time, she said. So far, this problem is not strongly felt, as there is still inventory in the economy, she said.
"Our economy really is entering a difficult period of structural changes associated with sanctions. The sanctions have primarily affected the financial market, but now they will begin to affect the real sectors of the economy more and more. The main problems will be associated not so much with sanctions on financial institutions as with restrictions on imports and foreign trade logistics and, going forward, with restrictions on Russian exports," she said.
Meanwhile, the Central Bank currently has around half of its gold and forex reserves at its disposal, Nabiullina said.
"We now have about half of the reserves at our disposal following the sanctions that Western countries imposed on the Central Bank. This is gold, yuan, and they do not give us the opportunity to manage the situation with the currency in the domestic market," she said.
This is why currency control measures were adopted and the requirement for exports to sell forex proceeds introduced, to stabilize the currency market situation, Nabiullina said.
Russia's international reserves were $609.4 billion on April 8.
Finance Minister Anton Siluanov has said sanctions had deprived Russia of assess to $300 billion of its reserves.