Page 144 - RusRPTAug24

discussed during Modi's visit to Russia right now.
The government has again relaxed the requirement for the repatriation of foreign currency earnings On Saturday (July 13), the government announced the second recent reduction in the requirement for mandatory repatriation of foreign currency earnings by major exporters from 60% to 40%. The last time the standard was reduced from 80% to 60% was three weeks ago, on June 21. Exporters must still convert 90% of credited currency into rubles. We believe that the standard could again be softened in order to limit the potential for the ruble to strengthen in anticipation of the tax period and an increase in the key rate of the Bank of Russia at its meeting on July 26. According to our previous estimates, a reduction in the standard for the sale or repatriation of proceeds by 10% creates conditions for a weakening of the ruble by 3-4% in the medium term, but the reaction of the exchange rate will ultimately depend on the behavior of companies. At the same time, restrictions on NCCs and the risks of secondary sanctions have limited opportunities for capital outflow and reduced demand for foreign assets, at least for some time, which allows the ruble to feel comfortable. We maintain our guideline for the ruble exchange rate at 92 and 93 rubles. per dollar on average in 2H24 and at the end of the year, respectively. The latest solutions allow us to make the following three assumptions:
144 RUSSIA Country Report August 2024 www.intellinews.com