Page 67 - RusRPTDec23

budget rule from August 10 until the end of the year because of the ruble’s fall.
The largest exporters have been obliged to sell foreign currency earnings for a month now—President Putin signed a decree on this when the dollar stood at 100 rubles. But it was not clear what should happen to the growing ruble earnings from exports going to foreign accounts. Meanwhile, in October, net sales of foreign currency by exporters increased to $12.5bn, and the share of the ruble in exporters’ revenue reached 42% in September.
Vedomosti found out that these rubles end up in a vicious cycle: at least half have to be exchanged for currency abroad, transferred to Russia and then exchanged for rubles here. The fact that the mechanism works exactly like this was told to the publication by several sources close to the largest companies, as well as in the government and the Russian Union of Industrialists and Entrepreneurs.
The fact is that in its current form, the standard for the sale within 30 days of at least 50% of the funds received under each export contract does not specify the currency of the contract. Therefore, it also applies to rubles. The Ministry of Finance confirmed the need to convert rubles into rubles through the purchase of foreign currency on the foreign market.
The companies subject to the decree would naturally like to abolish this norm, and the government is not against it in principle - but only on an individual basis, Vedomosti sources in federal bodies and the Russian Union of Industrialists and Entrepreneurs told Vedomosti. Companies will have to prove to a government commission that they are actually paid for exports in rubles and that they do not hold the currency abroad.
Conversion in a circle is the main complaint against Putin’s decree, but there are others: too strict conversion deadlines tied to the shipment of goods, uncertainty regarding the coverage of foreign subsidiaries, and the lack of clarity in the exchange of data on foreign currency sales with Rosfinmonitoring.
67 RUSSIA Country Report December 2023 www.intellinews.com