PRESS: Finance ministry suggests tough currency curbs in crisis

MOSCOW, Oct 24 (PRIME) -- Russia’s Finance Ministry plans to lift an obligatory return of export foreign currency revenue to liberalize currency regulation, but asked the central bank to allow the ministry to impose tough foreign currency restrictions in case of a crisis, Vedomosti business daily reported on Tuesday.

In a report to Prime Minister Dmitry Medvedev, Finance Minister Anton Siluanov listed the restrictions that include a requirement for exporters to repatriate money, obligatory sales of foreign currency, the need to obtain permits to buy foreign currency, to open special accounts and to reserve money for some operations with foreign currency,, Vedomosti reported quoting the report.

A government official told the business daily that these measures are meant for emergency, as the experience of 2014 requires preparations for any type of a situation even though there is nothing to worry about now. The government is discussing what to consider an emergency, the official said.

In 2014, the government approved a law allowing it to set a minimum share of ruble settlements in export operations, but the new regulation will be applied to everyone, even to those who temporarily invest in Russian assets. The government understands that investors may react negatively to the measure and promises to develop the measure with caution, the person said.

Vladimir Tikhomirov, chief economist at BCS, said that the measure may partially be connected with a possible expansion of the U.S. sanctions and a ban on ownership of Russia’s sovereign debt. The sanctions will create great tension on the market of sovereign bonds, as many foreigners, including Americans, bought them over the past years attracted by a high yield. This may result in a high demand for foreign currency, he said.

Natalya Timakova, press secretary of Prime Minister Dmitry Medvedev, said that Medvedev chaired no government meetings to discuss the issue. The central bank did not provide a comment, while the Finance Ministry declined to comment.

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