Russia’s central bank plans to relax restrictions on banks from countries deemed to be “unfriendly” trading foreign currencies on the Russian forex markets.
The Kremlin listed a number of countries as “unfriendly” after they imposed sanctions against Russia following the invasion of Ukraine. Prior to today’s decision banks from countries with such designation were unable to conduct forex trades in Russia due to retaliatory sanctions.
The bank said the decision to ease restrictions would “support foreign economic activity and create the conditions for building new supply chains”.
The bank has also lifted a 30% limit on advance payments to non-residents on import contracts for some services, one of the measures introduced to protect the ruble from international economic pressure.
With dividing lines once more being drawn between east and west, Russia is moving its economy away from dependency on and cooperation with the US and Europe. The restrictions on foreign currency trading, along with reduced imports, have seen the ruble soar in value, spooking policymakers and investors who fear damage to the country’s industry as a result.
The lifting of restrictions is expected to help rein in the ruble’s rise, in addition to interest rate cuts announced by the central bank.
The central bank said that the removal of restrictions would “help Russian banks better meet the demand of companies and citizens”, clarifying that non-financial companies from countries deemed unfriendly would still be barred from trading.