Putin proposes currency cap for Russians in foreign transactions

Putin proposes currency cap for Russians in foreign transactions

Russian President Vladimir Putin orders restrictions on foreign currency purchases for Russian citizens and firms doing business abroad, with a $1 billion monthly limit to be introduced on purchases from the domestic forex market.

Russian citizens and corporations doing business abroad may soon be restricted in the amount of foreign currency they are allowed to acquire, on order from Vladimir Putin. Russia’s head of state now wants his Government to cap such purchases on the domestic forex market.

President Putin Orders Russian Authorities to be Limited Foreign Currency Purchases

Russian President Vladimir Putin has tasked the federal Government and the monetary authority in Moscow to introduce a $1 Billion monthly limit on the buy of foreign currency meant to be executed in transactions with entities and individuals in other countries.

Reports by an announcement by the Kremlin, the restrictions will apply to Russian residents buying other nations’ currencies in the domestic foreign exchange market for transfers abroad within government-approved settlements, the RIA Novosti news agency reported.

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The order is part of instructions announced after a meeting on economic matters held on April 11 but published only past week. The measures will affect transactions crediting “accounts opened with banks located outside the territory of the Russian Federation.”

The deadline for imposing the limit has been set at June 1, 2023. Putin likewise asks the Bank of Russia and the Ministry of Finance to draft a list of cases in which the restriction would not apply.

Russia has been dealing with heavy Western sanctions imposed in response to its invasion of Ukraine in late February 2022, including freezing of its foreign currency reserves abroad and restricting its access to banking and financial services.

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To prevent shortages of convertible currencies like the United States dollar and the euro likewise as flight of financial resources, Russian authorities introduced foreign currency restrictions last spring and have been seeing as ways to circumvent the sanctions, including by de-dollarization of international trade and working on SWIFT alternatives.

Moscow has been likewise taking steps to legalize cross-border cryptocurrency payments. In November, Putin himself was known for international settlements according to blockchain tech and digital currencies. In mid-May of in the year, the head of the parliamentary Financial Market Committee, Anatoly Aksakov, unveiled that Russian lawmakers are preparing to adopt four bills related to digital currencies by the end of July.

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