Elvira Nabiullina, Governor of the Central Bank of Russia statedIt was reported that the Central Bank decided to extend the restrictions on cash and foreign currency issuances in September. He also said at the Central Bank Board of Directors meeting that the circulation of foreign currency in Russia is limited due to the sanctions of unfriendly countries, but despite this, the dollar will continue to circulate in the Russian Federation. He noted that the situation regarding the purchase of cash foreign currency is not expected to improve in the near future.
The decisions of the unfriendly countries that I mentioned earlier – banning the import of cash into Russia – remain in effect. Banks should be able to give citizens their rights to previously opened foreign currency accounts and receive them. The amount, within the allowable limit of 10 thousand, – said Nabiullina.
Room registeredAbout 90% of depositors can withdraw from deposits despite restrictions.
The Central Bank’s temporary procedure for transactions with cash is valid from March 9 to September 9, 2022. It assumes the probability of withdrawing more than $10,000 from foreign currency accounts and deposits at the market rate on the day of issue. The Central Bank attributed this to the fact that about 90% of foreign currency accounts in Russian banks do not exceed $ 10,000. For customers who store large amounts, it is recommended to withdraw the balance in rubles – also at the current rate. . The possibility of opening deposits and new foreign currency accounts remains, but it will not be possible to withdraw money from them during the restrictions. The currency will be issued in US dollars, regardless of the currency of the account, other foreign currencies will be converted to dollars at the market rate. But during the restrictions, banks will not sell cash to citizens. It is noted that at any time and in any amount of currency can be exchanged for rubles.
doomsday scenario
Also Nabiullina statedIn Russia, the cash dollar will continue to circulate even under the apocalyptic scenario, but the Central Bank will continue to encourage devaluation processes and the conversion of bank balances into rubles or friendly countries’ currencies.
“Even in an apocalypse like this, I would say, the scenario is a complex one, we’ll have cash dollars in the country,” he said, adding that Russian banks had handled the current crisis better than the regulator had expected.
According to the Central Bank, the Russian people have cash, dollars and euros, 85 billion dollars in their hands.
Nabiullina also noted that the economic recession in Russia will extend over time and may not be as deep as thought. He noted that a smaller decline in GDP is expected this year, mainly due to the moderate decline in exports due to the redistribution of oil exports to new markets. The regulator revised the decline to 4-6% instead of the previous 8-10%.
Cheap loan facility
During the meeting, Nabiullina also announced that the Central Bank has decided to cut the key interest rate by 150 basis points to 8% per annum. This decision was explained by the low growth rate in consumer prices, which contributed to a further slowdown in annual inflation.
A key potential revision to further declines is expected in the second half of 2022, says on the editor’s website. He also says that the Central Bank of Russia expects annual inflation to fall to 12-15%. Inflation is expected to return to 5-7% annually for 2023, and to 4% in 2024.
In response, Sberbank announced that from July 26, it will reduce the base rate on mortgage programs by 0.6%, while the minimum rate will be 9.9% per annum. The new conditions apply to both new buildings and the secondary market.