Russian President Vladimir Putin on Monday banned the transfer of currency abroad. And he ordered companies with economic activities abroad in the framework of foreign trade to convert 80% of their income into rubles, according to a decree signed by the president to defend Russia from western sanctions.
“As of February 28, residents who participate in economic activities abroad must carry out the mandatory sale of foreign currency in the amount of 80 percent of the amount of foreign currency credited in their accounts under foreign trade contracts with non-residents. (…) », indicates the decree.
The text also prohibits, as of tomorrow, carrying out “exchange operations related to the provision by residents in favor of non-residents of foreign currency. And transfer foreign currency to accounts opened in banks and other financial market organizations outside Russia».
All this following Russia suffered the onslaught of the new Western sanctions, which put the Central Bank in the spotlight and include the expulsion of several banks from the SWIFT system. Which translated into the collapse of almost 30% of the ruble and forced Moscow to take out its arsenal to ensure financial stability.
Putin prohibited transferring foreign currency abroad and other measures to protect Russia from sanctions
Among other measures, the Central Bank of Russia (BCR) suddenly raised the interest rate from 9.5% to 20%. This to support financial stability and protect the savings of the population.
It also released the capital reserves accumulated by the banks for a value of 733,000 million rubles (6,245 million euros or 6,963 million dollars). Mainly for consumer loans and unsecured mortgage loans in rubles and foreign currency.
At the same time, it recommended that financial entities restructure their clients’ debt instead of imposing sanctions or fines if their financial situation deteriorated due to the sanctions. And decided to prohibit brokers from selling foreign securities.
