Sergey Ignatiev, chairman of the Central Bank of Russia
Photo: Ilya Pitalev
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CBR Getting Ready for RUR Conversion
In an effort to materially improve the investment climate in the country, the Central Bank of Russia (CBR) has lowered to zero the required sales of the currency earnings and reduced two fold the standby funds required when entering into capital currency transactions.
The tricky point in the CBR resolution of March 27 is that the bank preferred to reduce to zero the mandatory sales of currency earnings instead of to drop the requirement in part and in whole. Actually, the CBR may revive the sales any time it wants. But the chances of this move are too slim to be considered, the more so that under Russia’s laws the mandatory sales of the currency earnings will be cancelled just the same on January 1, 2007.
The second news is the two fold reduction in required reserves for capital transaction. This effort of the bank is rather sensational, as no one could have hoped for the so prompt actions of the CBR. In the CBR, they attribute both decisions to “the positive movement of macroeconomic indicators, state budget’s surplus, high level of gold and currency reserves and regular excess of currency supply over its demand on domestic market of Russia.”
The two fold reduction in the standby funds required for capital transactions is in line with the program of Russia’s authorities that sets forth transition to complete conversion of ruble. The analysts say to attain this purpose it is still necessary to do away with capital transactions reserves and the requirement for currency repatriation.
www.kommersant.com
All the Article in Russian as of Mar. 28, 2006
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