Further easing of currency restrictions is not anticipated to a large extent, though small adjustments remain possible. This was announced on Monday, April 17, by Elvira Nabiullina, chairperson of the Central Bank of the Russian Federation, during a meeting with the New People party in the State Duma. Source: TASS.
“The relaxation has been achieved, and no further major measures are expected in exchange rate controls. There may be some tweaks or fixes, but overall the system appears to be stabilizing,” she stated.
In early March of last year, against the backdrop of Western sanctions and market volatility, the Central Bank restricted cash circulation within Russia. The regulator capped how much cash individuals could withdraw and how much could be issued from existing deposits, with these restrictions remaining in effect until September 9, 2023. Additionally, transfer restrictions to foreign banks for individuals were extended until September 30. See: official briefings by the Bank of Russia.
Earlier, in March, President Vladimir Putin issued a decree prohibiting the export of more than $10,000 in cash from the country.
About inflation
At the event, Nabiullina noted that the Central Bank has not set inflation at any cost as its sole target.
“We are not currently choosing to push inflation to the 4% target at all costs,” he explained.
The regulator expects inflation to be in the 5% to 7% range this year and around 4% from 2024 onward. Earlier, there was a note that annual inflation in Russia dipped below 4% in March and may ease further in April.
About Mir cards
Nabiullina said the Central Bank, together with the Russian government, is working to create conditions for foreigners who wish to obtain Mir payment cards.
“A key issue is remote identification. A nonresident must verify their identity to receive a Mir card. We are examining the possibility of remote identification so that a card could be issued remotely, for instance via a virtual card and then picked up in person at a location such as an airport. A project of this kind is underway, and legislative changes to enable remote verification are being considered. In our view, this is achievable,” she stated.
She estimated that legislative adjustments could be enacted as early as the spring semester. The head of the regulator believes that remote identification is useful and necessary for many purposes, despite resistance in some quarters.
Nabiullina added that the Bank of Russia continues to expand the infrastructure for Mir card acceptance abroad in destinations popular with Russian tourists, including Turkey.
About cryptocurrency
During today’s meeting in the lower house, the central bank governor indicated that cryptocurrency use in foreign settlements would be permitted as an experimental measure.
“Cryptocurrencies should not be used domestically, but for foreign settlements we are considering a temporary experimental regime,” he explained. A bill outlining this experimental framework is being prepared.
The governor noted that plans include creating specialized authorized institutions where mining and settlements linked to foreign economic activity would take place.
“This also covers digital financial assets beyond those tied to global systems, which would be used in accordance with our laws to facilitate international settlements,” Nabiullina said.
About mortgage policy
The Central Bank emphasized its support for targeted preferential mortgage programs and called for prioritizing housing construction in smaller towns.
“Mortgage crises are a serious problem. They ripple through the economy. Our aim is to maintain balanced mortgage growth and monitor this closely,” Nabiullina remarked.
She suggested that after the preferential housing loan program ends without a specific address, the program should retain the address component. The development of residential construction should receive priority in small towns where market activity is stagnant, she added.