Putin urgently convenes a meeting due to the fall of the ruble, - FT

Russian dictator Vladimir Putin is convening an urgent meeting to discuss tightening currency controls.

This was reported by RBC-Ukraine with reference to the Financial Times.

At the meeting, Putin is to hear proposals from the Russian Ministry of Finance to oblige exporters to convert part of their foreign currency earnings, most of which are now abroad, into rubles.

According to the Financial Times, exporters will be required to sell up to 80% of their foreign currency earnings within 90 days of delivery and will be banned from receiving state subsidies if they refuse to comply.

It will also be proposed to introduce:

• a ban on dividend payments and loans abroad, even to countries that Russia considers "friendly"

• abolition of import subsidies;

• restrictions on currency swaps;

• reducing the amount of foreign currency that exporters can take out of Russia.

These actions demonstrate the Kremlin's growing concern about the impact of the war on the country's economy. They would not be the first time Russia has tightened currency controls since the first weeks of Putin's invasion of Ukraine last year.

It is worth noting that currency control is one of the sensitive topics for the head of the Russian central bank, Elvira Nabiullina. She has previously told friends that she would resign if it were introduced.

As a reminder, on August 14, the Russian ruble broke through the psychologically important level of 100 per dollar for the first time since March last year.

The Russian currency has almost halved in value from last year's peak amid increased government spending, falling energy revenues, and Russians' desire to place funds in foreign accounts.

Author – Anastasiya Glotova, 17/08/2023