The Central Bank allowed banks to sell foreign currency in any amount
Photo: Alexey BULATOV
But this is unexpected. This is how many perceived the decision made by the Central Bank on Friday. The regulator decided to lift one of those monetary restrictions that it introduced last spring. That is, now banks can sell any currency. Regardless of when you came to them.
Let me remind you that at the beginning of March last year, the Central Bank completely prohibited the sale of dollars and euros to the population. Cash was scarce at that time. Authorities decided to conserve supplies until alternative supplies could be established. And the sharp increase in the dollar exchange rate had to be reduced.
Since April 9 last year, the Central Bank has slightly eased restrictions. Banks could now sell currency to the public, but only what reached their accounts after April 9. But the old stocks couldn’t be touched. At first there were few dollars and euros in the exchange offices. But then the problem stopped being serious. The currency has reappeared in the country. At least in the branches of the big banks in the big cities there were no longer problems buying dollars and euros.
Now the Central Bank has allowed banks to sell foreign currency in any amount. Regardless of when it arrived at your accounts. According to experts, this will cause a slight increase in the ruble exchange rate.
– If we take into account that until recently citizens sought to exchange hostile papers at a favorable price, then everything is the other way around. In order for the ruble to confidently turn “to the north”, it is necessary to increase the supply of dollars and other “foreign” currencies to decent people. So, in principle, this step will not increase the demand for currency, but it will increase the supply; Yes, you can,” says Evgeniy Kogan, investment banker and professor at the Higher School of Economics.
Actually, that’s what happened. As a result of Friday’s trading, the ruble strengthened by half a percent, up to 97.9 rubles per dollar. However, according to experts, this decision by the Central Bank is unlikely to greatly affect the exchange rate. Because the main reason for the continued weakening of the ruble is not the demand of the population, but the recovery of imports and the fall in export earnings. To balance the exchange rate, or rather, to strengthen the ruble a little, additional measures will be necessary.
– In this sense, there is still work to be done to restore balance to the exchange market. Long and painful. And, of course, not only by tightening monetary policy (i.e. increasing the official interest rate), says Evgeniy Kogan.
Possible measures have already been discussed in the government. In particular, the Ministry of Finance believes that the time has come to introduce monetary restrictions. In particular, forcing exporters to sell, if not all, most of the country’s foreign exchange earnings. But this decision has not yet been made.
Perhaps also because the low exchange rate helps increase budget revenues. According to economists’ calculations, a depreciation of the ruble by 1 ruble against the dollar generates an additional 100 billion rubles in tax revenue per year. Since the beginning of the year, the ruble has weakened by about 25 rubles against the dollar. If the exchange rate remains at the same level as now, more than 1.5 trillion rubles will be contributed to the budget.
At the same time, the disadvantage of an overpriced dollar is the acceleration of inflation. The Central Bank fears that price growth will accelerate due to rising prices for imported goods. But so far these fears seem exaggerated. According to Rosstat, since the beginning of the year inflation has increased by only 3.7%. At the end of the year it can grow up to 7% annually. But this level can hardly be seen as the level at which it is worth slowing the economy that much down through a higher key rate. Now it is 12% annually. And some analysts believe that on September 15 the Central Bank will raise it again.
BY THE WAY
Is it now possible for citizens to withdraw currency from their accounts?
While the requirements for banks have been relaxed, they have not for their clients. As before, you will not be able to withdraw dollars or euros from your account and receive them in cash. More precisely, it is possible, but not more than 10 thousand dollars. And even then, only if they were in the account before March 9, 2022.
The bank will automatically convert any other amounts to rubles and recalculate them at the exchange rate. The only thing that can please customers is that banks are prohibited from charging commissions for such a conversion. The Central Bank extended this ban for another six months, until March 9, 2024.
