Stable ruble, combating capital outflow — results of EFF’s first day

  VLADIVOSTOK:  Russia’s authorities are developing a set of measures to curb capital outflow, which will be applied in the near future, Pre...


VLADIVOSTOK:  Russia’s authorities are developing a set of measures to curb capital outflow, which will be applied in the near future, Presidential Aide Maxim Oreshkin said on the sidelines of the Eastern Economic Forum (EEF) that has kicked off in Vladivostok. Chairman of the Board of Directors of the United Shipbuilding Corporation, Chief Executive Officer of VTB Bank Andrey Kostin proposed introducing restrictions on the withdrawal of rubles from the country, with measures in this direction under discussion now.

TASS has collected the main statements by the forum’s participants.

The worst for the ruble has passed

Oreshkin told reporters on the sidelines of the EEF that the the worst of the ruble's downturn is in the rear view, backing his argument up with foreign trade figures. "The current account (of balance of payments - TASS) is recovering now. Imports of goods and services will go down slightly by the end of the year, while exports will increase strongly as oil prices have recovered substantially: after falling to $50-55 per barrel the [price of] oil exported by Russia now stands at $70-75 per barrel," the Presidential Aide said.

The weakening of the Russian national currency "was related to a decrease in oil prices in the first half of this year, while imports, on the other hand, recovered as trade flows bounced back, with flows redirecting from western markets to southern and eastern ones, which is why imports recovered," he said.

"The fact that the exchange rate will be more stable in the mid term is obvious," the official noted.

Barrier to capital outflow

Kostin suggested in an interview with RBC in the run-up to the EEF that a limit be introduced on the withdrawal of funds in rubles from Russia. "It should simply be understood that we do not live in peacetime. <…> Let’s say you decide to transfer money abroad: limits have been set at $1 mln per month, while in rubles you transfer as much as you want. <…> You have transferred a billion to Armenia and it is exchanged at once for dollars. This is an example what should not be allowed," he explained.

"This requires assessment and analysis on how this mechanism is indeed employed and so on," State Secretary - Deputy Governor of the Bank of Russia Alexey Guznov said commenting on the proposal.

In turn, Oreshkin said that the set of measures restricting capital outflow "will be applied in the near future." "The government and the Central Bank are working on it now, with some decisions already being made," he noted.

No visas, but foreign tourist cards required

Russian authorities are talking about removing the visa requirements for friendly countries. Communication to this end is underway with Middle Eastern and Southeastern Asian countries.

"We have offered to fully lift the visa requirement to Kuwait, Oman, Bahrain, Saudi Arabia, Malaysia, where an increase in (the number of) premium tourists is possible as well. That is why we are interested in it," Economic Development Minister Maksim Reshetnikov said during a session of the Eastern Economic Forum.

As of today, the electronic visa mechanism launched on August 1 is in effect. "In August, 30,000 foreign citizens arrived, with half of them being Chinese citizens," the minister said.

The plan is to launch special payment cards for foreign tourists’ convenience. "A respective law was passed during the spring session of the State Duma. We expect this mechanism to be launched in Q3 or the beginning of Q4," he said.

What to do with rupees

The forum’s participants also discussed the situation with billions of rupees in the accounts of Russian companies. In particular, Sber is exploring the possibility of using the Indian currency for lending to corporate clients. "The issue concerns Russian companies that have international trade operations with India or open business in the country. Such financing is possible here," deputy chairman of Sberbank’s executive board Anatoly Popov said. "The rupee has certain limits, of course, as it is not a freely convertible currency, and the Indian regulator brings forth rather tight restrictions on the movement of capital, though some one-off solutions, including lending, in rupees are quite possible," he added.

That said, Director of Sber’s Center for Macroeconomic Research Oleg Shibanov believes that rupees "cannot become the main currency in payments."

-News Feed




Local Glob: Stable ruble, combating capital outflow — results of EFF’s first day
Stable ruble, combating capital outflow — results of EFF’s first day
Local Glob
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