On the other hand, there are no restrictions on exchanging foreign currencies for rubles.
(Photo: Bloomberg)
Moscow The Russian central bank imposes drastic restrictions on foreign exchange trading in view of the western sanctions in the Ukraine war. Russian banks will no longer be able to sell foreign cash to citizens, as the central bank announced on Wednesday night. The package of measures applies from Wednesday until September 9th.
This also means that you can only withdraw cash in foreign currency from a foreign exchange account up to an amount of 10,000 dollars (around 9,200 euros). For higher amounts, the rest is paid in rubles at the daily exchange rate. Regardless of what currency the accounts are held in, one can only get dollar cash. On the other hand, there are no restrictions on exchanging foreign currencies for rubles.
At the same time, the central bank pointed out that 90 percent of accounts held in Russian banks in foreign currencies were less than $10,000.
Sanctions imposed over Russia’s war of aggression against Ukraine have plummeted the ruble and made it harder for Russia to access foreign currencies. In addition, the high reserves of the Russian central bank of more than 600 billion dollars are effectively blocked. Stock trading on the Moscow stock exchange has been suspended for more than a week because of the sanctions.
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The rating agency Fitch has also lowered Russia’s credit rating again. The company on Tuesday downgraded its credit rating from “B” to “C” even lower in the so-called junk zone, which is intended to identify high-risk investments. The rating now means that a default is likely to be imminent, Fitch said. The credit watchers justified the assessment with increased doubts about Russia’s willingness to pay.
The sanctions limit the options for paying off debts to international creditors anyway. The other two major rating agencies, S&P and Moody’s, had recently lowered Russia’s credit rating further into the junk zone. Actually, Russia’s treasury is well stocked. However, the access to currency reserves, which is severely limited by the sanctions, is considered particularly critical.
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