Russia’s central bank will allow banks from designated “unfriendly countries” to trade between foreign currencies on the Russian forex markets, the regulator said on Wednesday.
Moscow has labelled countries that hit it with sanctions as “unfriendly” – a list that includes the entire European Union, United States, Britain, Japan, Australia and others.
The bank also abolished a 30% limit on advance payments to non-residents on import contracts for some services – part of currency controls introduced after Russia sent tens of thousands of troops into Ukraine, triggering a raft of Western sanctions.
The central bank said the relaxation of the controls would “support foreign economic activity and create the conditions for building new supply chains”.
Russia has pushed its financial sector to move away from the U.S. dollar, euro and other currencies of countries that have levied sanctions on Moscow since Feb. 24. Amid falling imports and the restrictions on foreign currency trading and withdrawals, the rouble has surged to multi-year highs. But that has spooked policymakers, who say the strong currency is hurting the country’s industry, and prompted the bank to slash interest rates and gradually lift some restrictions.
Allowing non-resident banks from “unfriendly countries” to start trading between different foreign currencies on the Russian market will “help Russian banks better meet the demand of companies and citizens,” it said.
A ban on trading in roubles will remain in place, the central bank said in a statement, and non-financial foreign companies from “unfriendly countries” are still prohibited from all forex trading on the Russian market.