Restrictions on exchange of rubles for FX abroad will only put more pressure on FX market - deputy CBR head
MOSCOW. Oct 10 (Interfax) - The Central Bank of Russia (CBR) continues to oppose the separation of internal and external ruble markets: the exchange rate is affected by the very fact of transfer of funds from rubles to foreign assets, not where these funds are located, deputy CBR Governor Alexei Zabotkin said.
"Given the fact that the inflow of currency to the domestic FX market is constrained by difficulties with settlements and so on, and part of foreign economic activity is now serviced to a greater extent by the external foreign exchange market, the movement of this demand, locking this demand inside the domestic market can only increase additional pressure on the exchange rate inside the country," Zabotkin said at a meeting of the State Duma Committee on Financial Market.
"If an individual does not want his savings to remain in rubles due to the fact that this individual fears that the purchasing power of these rubles will decrease, he will use these rubles to buy foreign currency, even within Russia. There is no restriction on the purchase of foreign currency. Under these conditions, the fact that he buys this currency here or he buys it abroad does not change the picture significantly," the deputy CBR chairman said.
The volume of ruble transfers abroad in 2023 is not significantly different from 2021, and it is noticeably less than it was in 2022, he said.
Zabotkin said that the ruble exchange rate is now influenced by the situation with exports, which have dropped significantly, and imports, which are supported by the growth of domestic demand.
Russian Economic Development Minister Maxim Reshetnikov recently launched a discussion about the so-called "membrane". He suggested solving the problem of high ruble volatility and inflation by looking to the Chinese model, where the yuan market is divided into internal and external, and implementing an analog of such a system. The Central Bank has been skeptical of this idea.