Bank of Russia Opposes Forex Restrictions 

The Bank of Russia said late Monday that it opposes any restrictions on using foreign currencies in Russia, addressing earlier calls from the country’s security council.

The inter-agencies commission of the Security Council of Russia had told the central bank and the government to work on boosting the ruble’s role in international payments, while limiting the usage of foreign currencies “on the territory of the Russian Federation,”

“The Bank of Russia assumes that such restrictive measures are inadvisable,” the Bank of Russia said in an emailed comment shortly before midnight.

Though the central bank has been pledging not to introduce any restrictions that would count as capital controls, any talk of possible restrictions causes a nervous response on the market.

The idea of using the ruble in international trade was put forward a decade ago and gained more support after 2008 when Russia floated the idea of turning Moscow into a global financial center. Russia has long wanted to boost the ruble’s image as a currency for international trade and a potential reserve currency, alongside the U.S. dollar, the euro and the British pound.

After Western sanctions that followed Moscow’s annexation of Crimea more than a year ago, Russia’s government vowed it would soon find ways to prompt export-focused companies to switch to rubles from dollars in their international trade. Trading the ruble against the Chinese yuan directly was also seen as the main alternative to the greenback.

Despite the promotion of using rubles and yuan in international trade, the price of a gas deal between Russia and China that was signed last May was announced in U.S. dollars, at $400 billion.

Source: nasdaq – Bank of Russia Opposes Forex Restrictions

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