As part of the measures to counteract the negative consequences of the financial sanctions imposed by the West, the Russian authorities have introduced numerous currency restrictions.Key indicators of the Moscow stock exchange and the dollar exchange rate in roubles from 25 July to 1 August (at the close of the session) In addition, Australia has decided to suspend the supply of bauxite to this company (a raw material for aluminium production). ![]() In the case of this entity, Western restrictions were imposed primarily on its main owner Oleg Deripaska. Russia’s largest aluminium company Rusal also reported a 55% drop in revenue (to around $1.2 billion) in the first half of 2022. In addition, the Kremlin, in support of the construction market, introduced price regulation for metals and metal products in March this year, which further reduced the profitability of metallurgical production. The trend is due to a reduction in demand both abroad (due to sanctions) and on the domestic market. For individual companies, the situation is much worse, with the Magnitogorsk Iron and Steel Works’s production down 38% and Severstal’s down 28%. The Russian government estimated that there was a 20% drop in metal industry production in the second quarter of this year. UK-based Lloyd’s is the largest insurance company in the world. The UK has allowed the provision of insurance and reinsurance services relating to vessels, aircraft and their component parts moving between a third country and Russia. On 1 August, the United Kingdom eased sanctions. There is also a ban on purchasing Western currencies in cash. Among other things, they cannot transfer their income, profits or dividends earned in Russia abroad or sell Russian securities. Restrictions imposed on non-residents still apply. Exporters (outside the raw materials sector) are also no longer obliged to repatriate funds earned abroad and can hold them in foreign accounts. In addition, the obligation to convert export revenue into roubles has been removed from Russian companies (previously they had to convert up to 80% of this revenue on the internal market). ![]() Since the end of June, citizens have been allowed to transfer abroad up to $1 million per month (or the equivalent in another Western currency) from their accounts in Russian banks. They can withdraw up to $5,000 in cash – in dollars, euros, pounds or yen – to cover business trip expenses.Īt the same time, in recent weeks the CBR has lifted most of the restrictions imposed at the end of February this year on the electronic trading of Western currencies. Restrictions have also been extended against legal entities (‘Russian residents’, i.e. In addition, banks are only allowed to sell to citizens the euros and US dollars received by banks’ cash offices after 9 April 2022. ![]() The CBR reported that accounts holding $10,000 or less constitute 90% of all foreign currency accounts but did not communicate what amount is deposited in the remaining 10% of accounts. Once this limit is exhausted, the remaining funds can be withdrawn in roubles (at the exchange rate of the day). Russian citizens can only withdraw up to $10,000 worth of funds from their from foreign currency accounts or deposits established before 9 March 2022 (this may be in dollars or euros, regardless of the currency of an account or deposit). On 1 August, the Central Bank of Russia (CBR) decided to extend restrictions on the purchase of Western currencies in cash for a further six months (until 9 March 2023).
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