Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Mandatory Forex Sales to Be Cut

Russia plans to reduce the amount of foreign currency local exporters have to sell on the domestic market to 30 percent from 50 percent, news agencies reported on Thursday.

The agencies reported that Finance Minister Alexei Kudrin, in a meeting with President Vladimir Putin, said that "at first the volume of obligatory currency sales would be reduced from 50 percent to 30 percent," adding that eventually the Central Bank hoped to eliminate them altogether.

"Later the Central Bank will cut it to zero, that is it will fully abolish the obligation, but it will retain a right to impose regulatory mechanisms in certain situations," Kudrin added.

Kudrin did not say when the new regulation would come into effect.

The plan to cut sales to 30 percent appears to represent a compromise between the Economic Development and Trade ministry and the Central Bank.

The Economic Development and Trade ministry, charged with re-engineering Russia's post-Soviet economy, had drafted a bill that would have lowered the requirement to 25 percent from 2003 and scrapped it in 2004.

But the Central Bank had favored a more cautious approach that would have cut the required amount to 35 percent. It opposed setting a legal deadline for abolishing obligatory sales.

The government is expected to discuss the draft bill on foreign currency controls at a Cabinet meeting on Oct. 17.

After the August 1998 financial crisis, when the ruble crashed and companies preferred to hold dollars, the Central Bank imposed a rule requiring local firms to sell 75 percent of their export revenues on local foreign currency markets. The requirement was trimmed to 50 percent last year.