Due to Western sanctions motivated by the invasion of Ukraine, Russian President Vladimir Putin on Monday (28) issued several measures to contain fall of the rubleThe Kremlin announced, including a ban on residents transferring currency abroad.
According to a decree published on the Kremlin’s website, Russian residents will be prohibited from converting foreign currency from Tuesday (the first).
In addition, the country’s exporters will have to convert 80% of the income earned in foreign currencies into rubles since January 1, 2022.
The announcement of these measures coincides with the government’s attempt to bolster the Russian economy’s defenses against the sanctions announced by Western countries in response to Moscow’s invasion of Ukraine.
The United States, members of the European Union and other countries have announced the exclusion of some Russian banks from the international banking payment system Swift and from any transactions with the Central Bank of Russia.
This last measure is aimed at neutralizing part of the huge foreign exchange reserves that Russia has accumulated in recent years, mainly due to its revenues from oil activities.
Selling foreign currency is one of the main tools that countries use when they want to support their national currency. However, on Monday, the ruble fell against the dollar and against the euro at the opening of the markets, reaching its lowest levels.
Western sanctions prompted the Russian Central Bank to raise the benchmark interest rate to 10.5 points (20%) to curb inflation.
