A Russian state flag flies over the Central Bank headquarters in Moscow, Russia, August 15, 2023. A sign reads: “Bank of Russia”. REUTERS/Shamil Zhumatov/File photo Acquire Licensing Rights
MOSCOW, Nov 7 (Reuters) – Capital controls on certain Russian exporters that went into force last month may have the opposite of their intended effect in the long term, leading to a weaker and more volatile rouble, the Russian central bank said in a report on Tuesday.
The measure, due to last six months, requires 43 undisclosed exporting firms to deposit with Russian banks no less than 80% of foreign currency earned, and then to sell at least 90% of those proceeds on the domestic market within two weeks.
The rouble has strengthened from beyond 100 to the dollar since that decree was announced. It was trading around 92.3 to the dollar on Tuesday afternoon. The central bank’s higher-than-expected hike in its main interest rate, to 15%, in late October has also helped.
The bank also said in its report that it expected annual inflation to start coming down next spring due to Russians’ increased savings and higher interest rates.
Annual inflation in Russia is seen at 7.25% in the fourth quarter, compared to 6.00% in the third quarter, according to the bank’s assessment.
Russia’s gross domestic produce (GDP) is expected to post year-on-year growth of 1.5% in the last quarter of 2023, slowing from 5.1% in the previous quarter.
Reporting by Alexander Marrow and Elena Fabrichnaya. Writing by Marina Bobrova
Editing by Gareth Jones
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