- Russia brought back some currency controls late Wednesday.
- Big exporters will be required to sell their foreign earnings on the domestic market.
- Moscow is trying to prop up the slumping ruble, which has shed around a quarter of its value this year.
Russia’s government said late Wednesday that it will bring back some currency controls in a bid to revive the ruble, which has shed around a quarter of its value this year as the war in Ukraine rages on.
Exporter companies, including big oil companies, will be required to sell their foreign exchange earnings for rubles on the domestic market, Moscow announced.
The Kremlin imposed similar regulations last year when the ruble crashed over 40% in the aftermath of Russia’s invasion, but lifted them when it rebounded.
It’s bringing in new curbs now in a bid to prop up a currency that has tanked 24% against the US dollar in 2023, hammered by high inflation and soaring war costs.
In August, Russia’s central bank brought in an emergency interest-rate hike. Currencies tend to appreciate when borrowing costs rise because they become more appealing to foreign investors seeking higher yields, but the measures failed to stop the ruble’s slide.
The ruble fared better after Wednesday’s announcement, though, climbing around 2% against the greenback in early-morning trading.
Nearly two years since the invasion of Ukraine, Russia’s economy is struggling but is yet to collapse in the face of widespread western sanctions.
President Vladimir Putin said last month that inflation was so high that it was “practically impossible” for businesses to plan for the future – but unemployment remains low, and the International Monetary Fund said this week that it expects the economy to expand 2.2% in 2023.
