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. Last Updated: 07/27/2016

Vote Set to Ease Cash Sales for Exporters


AP

Mikhail Zadornov, deputy head of the Duma's budget committee

The State Duma on Tuesday set Wednesday to debate a bill that would slash the proportion of hard currency earnings exporters must sell locally to 30 percent from 50 percent.

Currently exporters have to sell half of their receipts within the country under a rule imposed after the 1998 financial crisis to prop up the weakening ruble. Firms were initially required to sell 75 percent of their export receipts.

"All the required three readings will be conducted in one day," Mikhail Zadornov, deputy head of the Duma's budget committee, told reporters.

The new legislation would allow the Central Bank to vary the rate under the 30 percent ceiling. It is also expected to ease upward pressure on the Russian currency.

The current rule has helped the bank build up its record high foreign currency reserves and enhanced Russia's creditworthiness. But an inflow of oil dollars has buoyed the ruble, making it more difficult for local firms to compete with foreign rivals.

It has also added to inflationary pressures because the Central Bank has had to print rubles to buy dollars from the market to keep the ruble's appreciation in check.

Businesses were lobbying to scrap the rule altogether but the Central Bank favored a more cautious approach.

Aton economist Peter Westin said officials should lower the ceiling even more: "Demand for rubles is picking up, investment opportunities are great as we have economic stability here, inflation is going down so incentives to keep money within Russia are increasing day by day."

The bill would have immediate effect if approved by both houses of parliament and signed by the president.