MOSCOW (Reuters). According to changes to the government decree, the Russian government has eased the requirements for the mandatory sale of foreign currency for exporters if more than half of the value of their contracts is paid in roubles.
In October, President Vladimir Putin signed a decree reimposing capital controls on dozens of companies in the fuel, energy, metallurgical, chemical, forestry and grain industries to prop up the ruble.
The Russian currency was pressured by capital outflow and a limited supply of foreign currency. In April, capital movement control measures were extended for a year.
Certain Russian exporters were required to deposit at least 80% of foreign currency earnings into Russian banks, and then sell at least 90% of that earnings on the domestic market within two weeks.
According to changes to a government decree signed on May 30, the Government Commission on Foreign Investments can waive foreign currency sales requirements for companies if more than half of the value of their foreign contracts is settled in roubles.
The central bank has long expressed doubts about the effectiveness of controls, publicly disagreeing with the government on the issue.
The controls were introduced when the ruble fell below the 100 mark against the dollar and the authorities tried to regain control of the foreign exchange market. Now the ruble trades around 90 per dollar.
The government argued that the controls reduce the risk of ruble depreciation. The Central Bank believes that high interest rates of 16% and strong export earnings had a greater impact on supporting the ruble.
(Reporting by Vladimir Soldatkin: Editing by Peter Graff)
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