Currencies

Russia allows banks to sell citizens foreign currency, except dollars & euros amid war

Amid the ongoing war with Ukraine and escalation of sanctions imposed on Moscow, the Russian Federation has decided to lift restrictions on the sale of cash currency with the exception of dollars and euros on Thursday. It was announced that with the exception of euros and dollars, Russian banks can sell foreign currency in cash to individuals without limitations starting May 20.

The Central Bank of Russia issued a statement saying that except for US dollars and euros, banks will be free to sell any foreign money in cash to citizens without limitations starting May 20, 2022. It also said that the current restrictions on the sale of US dollars and euros remain in place and that the residents can only buy US dollars and euros that arrived at bank cash desks on April 9, 2022, until September 9, 2022. It further said that permission to sell a currency other than the US dollar and the euro without limits is owing to bank balances of foreign banknotes. The statement also informed that previously, the Central Bank clarified that these prohibitions extended to all types of monetary currency.

The Bank of Russia decided in March to limit credit institutions’ capacity to sell cash to citizens due to the significant volatility of the ruble exchange rate, according to TASS. The regulator loosened the limitations on April 18, and banks were given permission to sell cash to citizens until September 9, but only cash that arrived at bank cash desks after April 9.

Inflation in Russia has reached a two-decade high

Meanwhile, inflation in Russia has reached a two-decade high of 17.8% in April, up from 16.7% in March, but there are indicators that it is reducing and will continue to do so, and the Russian ruble has risen from an all-time low in March to become the best-performing currency this year, according to CNBC. Despite Western sanctions freezing vast swaths of Russia’s reserves, economic activity indices are rising, and the country has avoided defaulting on its foreign currency debt thus far. On the other hand, Denis Manturov, who is Russia’s Minister of Industry and Trade, has stated that cryptocurrencies will be legalised as a form of payment in the country “sooner or later.”   

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