Russia needs export rethink but no capital controls, central bank chief says
2022.06.16 11:01
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Elvira Nabiullina, Governor of Russian Central Bank, attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 16, 2022. REUTERS/Anton Vaganov
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(Reuters) -Russia needs to rethink the contours of its export-dependent economy to ensure that industry works for the domestic market rather but most capital controls should be scrapped, Central Bank Governor Elvira Nabiullina said on Thursday.
Nabiullina, speaking at Russia’s flagship annual economic conference in St. Petersburg, said that a “substantial part” of Russian industry should start working for the domestic market, rather than rely on exports for revenue.
She said most of Russia’s capital controls should be scrapped and that there would be no ban on Russians holding bank accounts in U.S. dollars or other foreign currencies.
“We have had a layering of currency restrictions,” Nabiullina said. “My opinion is that they should be taken down, most of them anyway.”
Russia introduced strict controls on currency operations in response to Western sanctions on Russia which included the freezing of around $300 billion of central bank reserves.
President Vladimir Putin has said that Russia will thrive despite the West’s imposition of the most severe sanctions in modern history but that it will have to reorient the foundations of Russia’s $1.8 trillion economy.
Nabiullina cautioned that there were fears that the loss of access to technologies would undermine the Russian economy.
She said Moscow needed to look at private initiatives to secure technological development and prevent a slide towards a Soviet-style situation in which Russia would fall behind its competitors.
