Russian central bank: No need to ease capital controls further for now
2022.11.08 03:44
© Reuters. FILE PHOTO: A customer holds banknotes of the Ukrainian hryvnia and the Russian rouble at a street market during Ukraine-Russia conflict in the southern port city of Mariupol, Ukraine July 15, 2022. REUTERS/Alexander Ermochenko
MOSCOW (Reuters) -Russia’s central bank sees no immediate need to further soften capital controls that have been supporting the rouble since the spring, Governor Elvira Nabiullina told lawmakers on Tuesday.
The rouble has become the world’s best-performing currency this year, boosted by capital controls that include curbs on foreign currency withdrawals.
The measures have also eaten into Russia’s export income by denting the value of dollar and euro proceeds from sales of commodities and other goods abroad.
Nabiullina warned against underestimating the impact of sanctions imposed against Russia over its actions in Ukraine, but said Russia’s economy and banking sector have stood up well to the challenge.
“Sanctions are very powerful and their influence on the Russian and global economy should not be downplayed,” Nabiullina said. “Isolating from their influence is not possible.”
As the West shuns Russia and Moscow seeks to develop other trading routes, potential partners are afraid of secondary sanctions, Nabiullina said.
“Digital currencies, which we and many of our major partners are developing themselves, can become one of the factors in dealing with this bottleneck.”
Sanctions particularly targeted Russia’s banking sector, which posted heavy losses in the first six months of the year and officials have pushed lenders to drastically reduce their exposure to the U.S. dollar and euro.
The sector’s ability to adapt shows that the structural transformation of the economy is underway, Nabiullina said, with corporate lending for January-October up 9.9% this year, faster than last year’s equivalent rate of 9.7%.
“We expect the positive dynamics in lending to continue and, at the same time, banks will be able to fulfil the new loan holiday programme both for the mobilised and members of their families,” Nabiullina said.
Those called up to serve in the army as part of President Vladimir Putin’s “partial mobilisation” are entitled to grace periods on mortgages, consumer and credit card loans for the duration of their service and for 30 days afterwards.
The mobilisation is already putting pressure on Russia’s finances, consumer demand and businesses.
