17 Aug 2023 10:55

Russian authorities opt not to impose mandatory sales of export earnings - paper

MOSCOW. Aug 17 (Interfax) - The Russian authorities have decided not to reimpose mandatory sales of forex earnings for the time being and will only monitor the actions of exporters.

An agreement not to impose requirements for the sale of forex earnings by exporters and introduce restrictions on the movement of capital was reached at a meeting President Vladimir Putin held with members of the government and Central Bank chief Elvira Nabiullina, business daily Vedomosti reported, citing sources.

The paper said the Cabinet has managed to informally reach an agreement with exporters to increase their sales of forex revenue, so for now it has decided to only monitor their actions. Representatives of the business community in general agreed to sell more forex revenue.

If the situation does not change, mandatory sales of export earnings will become inevitable, one of the paper's sources said.

Participants in the meeting also agreed that, in addition to monitoring sales of forex earnings by exporters, they will work out a mechanism to curb the growth of lending. The Central Bank promised to work on this with banks.

Interfax sources said earlier that government agencies and the Central Bank of Russia (CBR) were in talks with exporters on measures to stabilize the ruble's exchange rate, including the reinstatement of mandatory sales of forex revenue. Senior officials of the government, CBR, Finance Ministry, Economic Development Ministry and Energy Ministry met with major exporters on Monday with the aim of finding measures to stabilize the ruble, one source said. At this meeting, representatives of the ministries and the CBR asked the companies to increase forex sales on the market and to report on the scale of these sales.

They also discussed the transparency of the distribution of forex earnings within companies and the possible use of intermediaries, one source said. In connection with this, they discussed the possibility of monitoring the accumulation of forex abroad, the source said.

If these measures have no effect by the end of the week, the authorities were prepared to reimpose mandatory sales of forex earnings on the domestic market. The baseline option in this case would be to require the sale of 70% to 90% of forex revenue within three months of a commodity being exported.

They were also considering banning payment of dividends and loans abroad, even in rubles and in friendly jurisdictions. Another possible measure was to ban lending to foreign trading divisions, as well as other transactions that could be classified as funneling money abroad.

Exporters who evade repatriation of earnings would face restrictions on pre-export financing, subsidies and support measures, the sources said.