PEOPLE LEAVING RUSSIA LIMITED TO CARRYING $10,000 AS SANCTIONS BITE

Russian bank run under way. Long queues of people trying to get their money out.

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Wed 02 March 2022:

Russian residents are no longer allowed to leave the country with more than the equivalent of $10,000 as the Kremlin tries to keep capital inside the country.

The rule affects movement of foreign currency too and seems designed to make sure that people attempting to leave Russia – as sanctions are slapped on the country – don’t take all of their hard currency with them.

Long queues are now common at cash machines that still have bank notes as people try to withdraw their holdings, against the backdrop of a rouble that is rapidly losing most of its value in light of the sanctions. Prices of imported goods are shooting up and people are trying to purchase some items, like new phones, before they become unaffordable.

Prices shooting up

Prices of imported goods are shooting up and people are trying to purchase some items, like new phones, before they become unaffordable.

Russian President Vladimir Putin says the rule limiting cash movements is a reaction to “unfriendly” steps taken by the US and other Western countries, which include sanctions that have been slapped on multiple Russian banks.

On Monday, the central bank and the finance ministry ordered exporting companies, which include some of the world’s biggest energy producers from Gazprom to Rosneft, to sell 80% of their forex revenues on the market, as the central bank’s own ability to intervene on currency markets was curbed.

Dmitry Polevoy, head of investment at Locko Invest, estimated that Russian exporters could offer $44 billion-$48 billion per month to support the rouble provided oil prices stayed around current levels and there were no sanctions on energy exports.

“This looks sufficient to stabilise the market in the next couple of weeks,” he said.

Sanctions targeting Russia’s energy sector remain on the table, White House press secretary Jen Psaki said on Monday.

The central bank temporarily banned Russian brokers from selling securities held by foreigners, although it did not specify assets for which the ban applies. It also said it would resume buying gold on the domestic market.

Russian President Vladimir Putin ordered a ban on foreign exchange loans and bank transfers by Russian residents to outside of Russia from March 1, the Kremlin said on Monday, in retaliation for economic sanctions imposed on Moscow by the West.

The United States and Britain banned their citizens or entities from transacting with the central bank, Russia’s National Wealth Fund or the Russian finance ministry.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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