Adam Berry
Russian President Vladimir Putin will hold a meeting on Wednesday with the country’s policymakers to discuss boosting currency controls to prop up the falling ruble, the Financial Times reported, citing two people familiar with the matter.
The emergency session comes even after Russia’s central bank on Tuesday jacked up its policy rate by 350 basis points to 12% to stem the ruble’s depreciation. This would mark the first time Russia has ramped up currency controls since the onset of Putin’s invasion of Ukraine last year.
The ruble, now changing hands at 96.29 to the U.S. dollar, has been stung by outsized deficits to fund the war, and consequently, depressed export revenues. With western sanctions freezing some $300B of its foreign currency reserves, Russia’s central bank can only do so much in trying to reverse the ruble’s losses.
In the meeting, Russia’s finance ministry will propose requiring exporters to convert a portion of their foreign currency revenue into rubles, the people told the FT. Specifically, exporters would be required to sell up to 80% of their foreign currency earnings within 90 days after delivery.
On top of that, dividend payments would be banned, import subsidies would be cancelled, currency swaps would be limited, the article said.
