A senior deputy speaker of the state legislature, Alexander Babakov, a member of the Fair Russia – For Truth faction, has urged Russia to restore the return of foreign currency earnings to the home economy and to reintroduce currency controls as a means to bolster the ruble. This suggestion comes in the wake of ongoing discussions about monetary policy and the health of Russia’s external accounts, and it is being framed as a path to greater economic stability for the foreseeable future.
Babakov linked the ruble’s slide to roughly 97 rubles per dollar to what he described as a worsening foreign trade balance. He argues that by reinstating currency controls and ensuring that a portion of foreign earnings are repatriated, the country could shield the real economy from volatile fluctuations and offer a predictable exchange-rate corridor for the next year and a half to two years. Proponents of this view—industrialists and financial analysts alike—believe that reintroducing exchange controls and accelerating repatriation could immediately reduce exchange-rate pressure and create a more stable environment for investment and production.
The deputy’s stance suggests that the stabilizing effect would extend beyond exchange rates. It includes the creation of a framework that could ease stress on producers facing input costs and financing constraints. Babakov proposes easing credit conditions for the real sector, particularly for manufacturers and agricultural enterprises, by lowering collateral requirements and expanding access to unsecured financing. The idea is that a steadier ruble, supported by predictable policy, would lower the risk premium on loans and encourage capacity expansion, hiring, and long-term planning.
Historical context matters here. Currency controls in Russia were abolished on March 1, 2018, and transaction passports were removed. Then, in February 2023, President Vladimir Putin issued a decree reversing the mandatory sale of foreign currency earnings by exporters. Under that decree, some firms could hold their foreign currency earnings in banks instead of converting them immediately into rubles, while still maintaining payments to suppliers through approved bank channels. Previously, the government had determined the extent of forced sales through a government commission, a policy first rolled out amid ruble depreciation pressures in 2022.
Recent market developments show a mixed picture. At Moscow Exchange auctions on a recent Wednesday, the dollar briefly traded above 97.5 rubles, the euro around 107 rubles, and the yuan near 13.5 rubles. Analysts note that rising oil prices alone are unlikely to deliver a durable strengthening of the ruble unless supported by broader macroeconomic reforms and credible policy signals. Dmitry Babin, a broker at BCS World of Investments, commented to a media outlet that the current price dynamics do not automatically translate into sustained ruble resilience.
From a policy perspective, the debate touches on the broader question of how Russia should balance monetary flexibility with the need for price stability and investment confidence. For observers in Canada and the United States, the discussion highlights how currency policy choices can influence transactional costs for exporters, importers, and multinational firms operating in or with Russia. It underscores the central issue of how government actions in exchange controls, capital flows, and credit conditions can ripple through the real economy, affecting investment cycles, inflation expectations, and labor markets.
While opinions diverge on the best approach, Babakov’s call reflects a persistent belief among some lawmakers and business leaders that a more predictable currency regime—whether achieved through partial controls or targeted repatriation measures—could offer a longer and more stable horizon for the economy. The ultimate aim, as stated by supporters, is to create a credible environment in which the real sector can grow with better access to financing and a steadier exchange rate corridor, reducing the risk of abrupt shocks and supporting resilience through future cycles. At the same time, advocates caution that any reintroduction of controls must be carefully designed to avoid distortions, preserve investor confidence, and align with international financial norms. The debate continues as policymakers weigh the trade-offs between monetary sovereignty and global integration. New data releases and fiscal indicators in the coming months are expected to shape the next phase of this argument and influence currency market expectations. These developments will be watched by observers across North America and beyond, given the potential implications for trade, commodity pricing, and regional financial stability.