The decree on the mandatory sale of export proceeds was the result of a compromise between experts, and it will have an effect, Russian President Vladimir Putin said at a press conference in Bishkek.
“There is reason to believe that the ruble exchange rate is fluctuating, among other things, because foreign exchange earnings are not being returned in sufficient quantities to use this money supply in the domestic market. I don’t know how effective this will be. In my opinion, there will be an effect. 100%,” Putin explained, answering the question whether there is confidence that the decision will reduce volatility in the market.
There are different approaches to solving the problem; the signed decree became a compromise between experts, since the positions of the government, the Bank of Russia and the presidential administration differed, Putin noted. “Of course, there is logic in the decision, but we also understand the threats. Therefore, nothing lasts forever, let’s see how it will work,” he added.
October 11 Putin signed decree on the mandatory sale of proceeds in foreign currency received by individual Russian exporters under foreign trade agreements. The goals of the innovation are to create long-term conditions for increasing the transparency and predictability of the foreign exchange market and reduce the possibility of currency speculation. The decree defines a specific list of 43 exporters related to the sectors of the fuel and energy complex, ferrous and non-ferrous metallurgy, chemical and forestry industries, and grain farming, which will be affected by these measures. According to the document, mandatory repatriation and sale of foreign currency earnings on the Russian market is introduced for these companies for six months.