Russia may face hard currency restrictions

Baku. 24 October. REPORT.AZ/ The Ministry of Finance of the Russian Federation, having abolished the decision to return the export revenues to the country for liberalization of currency legislation, plans to offer the Central Bank the application of toughening currency restrictions in crisis situations.

Report informs citing the Vedomosti, finance minister Anton Siluanov said in his report to Prime Minister Dmitry Medvedev.

"The restrictions include the issuance of a currency permit, the opening of special accounts for various currency transactions and the reservation of funds on these accounts. It is expected that these amendments will be added to the currency control law. Notably, currently foreign currency transactions are carried out without any restrictions among residents and non-residents”, newspaper said.

Finance minister also noted that there is no reason for concern. These adjustments will be applied to avoid the bitter experience of 2014.

Chief economist at Austrian bank BKS Vladimir Tikhomirov said that currency restrictions might be due to expected US sanctions. Thus, the new sanctions may ban transportation of Russian sovereign debt, ie investments in Russian state bonds. This can cause serious tension in the bond market. Because recently, non-residents, especially Americans, purchased bonds at large volume. If they start sales, demand for US dollar in Russia may sharply increase.