Central Bank froze foreign capital

The Central Bank of Russia took restrictive measures in retaliation against hostile countries that had frozen the country’s gold and foreign currency reserves. This is stated in the statement of the Central Bank of the Russian Federation.

“Restrictions were placed on the movement of capital, a ban on the sale of securities by foreign investors, and a ban on withdrawing funds from the Russian financial system,” the regulator said.

At the same time, all payments on corporate debts of Russian companies and public debts to owners from unfriendly countries will be made only with the permission of the government commission.

Central Bank announced The freezing of some of Russia’s gold and foreign exchange reserves in dollars and euros could not be prevented. Non-cash money is always reflected in correspondent accounts at foreign banks and can therefore be frozen,” they explained.

Sanctions against the Central Bank of Russia were implemented by Western countries at the end of February, following the military special operation initiated by the Russian Federation in Ukraine. Finance Minister Anton Siluanov said that as a result, the Russian Federation lost access to a very significant part of its reserves – almost $300 billion out of $640 billion.

The Central Bank of the Russian Federation then took retaliatory measures: it prohibited banks from transferring funds from abroad to citizens of countries that imposed sanctions. This measure affected 43 states, including all EU countries, the USA, Canada and a number of other countries. Russian stockbrokers are prohibited from selling securities on behalf of foreign clients.

Non-residents from third countries cannot transfer more than $5,000 per month abroad through money transfer systems. This decision was taken to prevent the leakage of money from the Russian market.

The Central Bank of the Russian Federation also gave assurances. All gold in gold and foreign currency reserves is safe in Russia.

“All gold from our gold and foreign currency reserves is in the vaults of the Bank of Russia on the territory of our country,” the regulator’s Telegram channel says.

It is stated that gold and foreign exchange reserves are a tool by which the Central Bank can protect the country’s economy from external crises. Such reserves help pay off foreign currency debt, pay off critical imports, and stabilize the foreign exchange market.

According to the Russian Central Bank, at the beginning of February, Russia had accumulated 132.2 billion dollars worth of gold and is stored on the country’s territory. Approximately $30 billion is held in International Monetary Fund reserves and Special Drawing Rights (SDRs). There will be no sanctions for this part of the reserves.

It’s harder, with $311.3 billion placed in securities from foreign issuers and $152 billion in cash in foreign banks. According to the data of the Central Bank of Russia dated June 30, 2021 (published in January 2022 with a six-month delay), the US dollar accounted for 16.4% of Russian reserves, the euro – 32.3%, sterling. – 6.5%, for the yuan – 13.1%. About 14% are located in China and about 40% of all funds are under the jurisdiction of the EU, USA, Canada and the UK.