Russia has banned the use of rubles to buy US dollars and other hard currencies for six months after the currency plunged after the war between Moscow and Ukraine.
During this period, banks are prohibited from selling cash to citizens. But people can exchange rubles for rubles at any time, in any amount, in any currency. The new rules will be effective from March 9th to September 9th, 2022. There is also a $ 10,000 limit on the amount of US dollars that can be withdrawn from a hard currency Russian bank account.
The central bank, the Russian Bank, said on March 9 that anyone who wants to withdraw a higher amount would have to accept it in the ruble. statement.. Banks pointed out that 90% of Russian banks’ foreign currency accounts do not have a balance of more than $ 10,000.
“Citizens can continue to deposit funds in foreign currency deposits and accounts. All funds will be stored and accounted for in the currency in which the account or deposit was opened. The deposit or terms of the account will not change. Interest will be calculated in the currency in which the deposit was opened, as usual. “
Moscow’s new rules aim to prevent Russian citizens from fleeing to raise US dollars. The ruble has been hit hard since its invasion of Ukraine. On February 23, the day before the invasion, I was able to buy about 80 rubles for $ 1. On March 7, this was close to 160 rubles. As of 4:43 pm UTC, the exchange rate of US $ 1 is about 120 rubles.
Outflows of foreign currency deposits from Russian banks clearly exceed the expectations of the central bank, and therefore of banks in countries that fulfill their obligations to depositors, the Russian Ministry of Finance and Sergey Alexachenko, a former employee of the central bank. I am questioning my ability. Banks Newsletter..
Alexsashenko condemned the Central Bank of Russia’s decision to impose restrictions on the use of foreign currency deposits. “If the Central Bank of Russia wants to panic among the people, it seems to me that it will be difficult to find a better way,” he said.
Russia is also trying to get citizens to save money with gold instead of dollars. Russian President Vladimir Putin signed a law on March 9 that exempts people from the 20% value added tax (VAT) that people had to pay when buying gold. The law is retroactive and applies to all purchases made since the beginning of this month.
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Naveen Athrappully is a news reporter covering business and global events in The Epoch Times.