Decree on foreign currency earnings was a compromise among several points of view, it will have an effect - Putin
BISHKEK. Oct 13 (Interfax) - The decree on the mandatory repatriation and sale of foreign currency earnings by some of the largest Russian exporters signed by the Russian President this week was the fruit of a compromise amongst various positions in government, the Central Bank and the Kremlin administration, and the effect of its implementation needs to be observed; it will play a certain role in stabilizing the market, Vladimir Putin said at a briefing in Bishkek.
"Only an insurance policy gives you confidence, and only if you are insured by a reliable insurance company," Putin began in response to Interfax's question on whether there is confidence that the steps taken will be enough to reduce the volatility of the foreign exchange market.
"We'll see how this tool works, but this is the result of the work of the government, the presidential administration and the Central Bank. The decree I signed is the result of this joint work. There are different approaches to solving this problem. The problem exists, it is connected with a certain imbalance of cash flows, before total, currency-related flows," the president said.
Following the introduction of anti-Russian sanctions, exporters adapted to new conditions, the President said. "Our economic operators quickly coped with all the problems they tried to create for them from abroad, and now there is reason to believe that the ruble exchange rate is fluctuating, partially because foreign exchange earnings are not being returned in sufficient quantities for use on the domestic market," Putin said.
"The question is simply about currency regulation: we have completely abandoned it, but in modern conditions, apparently, our economic operators prefer to leave a significant part of their foreign exchange earnings abroad. That's the whole point. And given the fact that imports have increased, commodity prices have recovered, and flows and logistics have improved (as they say, "necessity is the mother of invention;" no matter what they come up with, we still have smarter people; they will come up with workarounds, and they did), import volumes have increased, and the desire to leave the proceeds abroad has multiplied," the President said.
"I don't know how effective this [the obligation to repatriate and sell foreign currency earnings] will be. In my opinion, there will be an effect, the effect will be 100%," the head of state said.
He stated that participants in the discussion had disagreements on the issue of how to regulate the foreign exchange market. "There are different approaches, the Central Bank has its own views, the government has its own, and the administration has a bit of its own. Nevertheless, the signed decree is the result of a compromise among specialists, among experts. And, of course, there is logic in the decisions made," Putin said.
The authorities understand "the possible threats associated with the movement of capital," the president noted, thereby recalling the skepticism of the Central Bank, which expressed concerns about the potential negative consequences of administrative regulatory measures. "Therefore, nothing lasts forever. Let's see how it works," Putin said.
"Let's see how the institution of these special commissioners from Rosfinmonitoring will work [implanted in the exporting companies]. By the way, let me draw your attention to the fact that they are being appointed not to regulate and manage something there, but with only one goal, which is to have reliable and complete information about these cash flows. That is all. So that the state is aware of the events taking place. But if all our departments achieved a certain compromise, which is set out in this decree, everyone proceeds from the fact that it is a positive development, and that there must be a result," Putin said.