Command control: is it worth loosening the "currency leash"

The mechanism of mandatory sale of foreign exchange earnings may remain with Russian exporters longer than expected. Despite the fact that the Central Bank considers it ineffective, the government and the expert community are increasingly talking about the need to maintain it at least until macroeconomic indicators stabilize. What are the differences between the departments, how this measure affects the budget, the ruble exchange rate and foreign economic activity — in the material of Izvestia.

Why did the currency sale mechanism appear?

In October 2023, the dollar exchange rate on the over-the-counter market exceeded 102.5 rubles. To stabilize the situation, it was decided to oblige large export companies to sell part of their foreign exchange earnings on the domestic market. According to a government decree, exporters are required by presidential decree to transfer at least 40% of their foreign exchange earnings to accounts in Russia, of which at least 90% must be sold on the domestic market.

Today, the requirement for the mandatory sale of foreign exchange earnings by exporters is valid in Russia until April 30, 2025. The decree on the sale of foreign exchange earnings expires at the end of April, but the Finance Ministry's proposal to extend it has not yet received unanimous support, Interfax reported.

Russian Deputy Finance Minister Alexei Moiseev said this week that the Russian government supported the Finance Ministry's proposal to extend for a year the current requirements for the mandatory sale of foreign exchange earnings by exporters, but the ministry remains at odds with the Central Bank on this issue.

The Ministry of Finance's position (in favor of extending the mandatory sale of foreign currency by exporters) may be explained by the agency's desire to insure itself in case of an increase in imports and, as a result, a deterioration in the current account situation, especially given the risk of a prolonged period of low oil prices, financial experts told Izvestia. The position of the Bank of Russia is quite traditional for the regulator — it has always advocated the market formation of the ruble exchange rate and against administrative pressure on participants in the foreign exchange market.

— We believe that this measure has helped to stabilize the situation on the foreign exchange market in October 2023. In particular, in the fourth quarter of 2023, the ruble exchange rate strengthened by more than 7%," said Nikolai Dudchenko, analyst at Finam Financial Group. According to him, this rule really played a role in easing the pressure on the ruble, although there is not always a direct relationship between the sale of revenue and the exchange rate.

The position of the Bank of Russia

The Bank of Russia reasonably believes that any restrictions on the movement of capital (and the obligation to sell foreign currency is such) distort market signals, limit the flexibility of the exchange rate and interfere with monetary policy, Deputy Director of the Banking Institute for Development Yulia Makarenko told Izvestia. The Bank of Russia emphasized from the very beginning that the forced sale of proceeds is a short—term measure, she noted.

— The Bank of Russia has consistently opposed the mandatory repatriation of revenue and considered this measure to be temporary and secondary compared to other instruments. Last year, Elvira Nabiullina, for example, said that additional difficulties were being created for companies when paying for import operations, for example, equipment purchases — double conversion had to be carried out, Nikolai Dudchenko recalled.

According to the Bank of Russia's "Financial Market Risk Review", in March 2025, the largest exporters sold currencies worth $10.2 billion. In January, this figure was 80% of revenue. That is, companies sell foreign currency even in excess of the established norm.

— At the moment, the system of mandatory sale of foreign exchange earnings does not particularly affect exchange rate formation, this in itself is a good thing. According to the Central Bank, large exporters realize significantly more export revenue on the Russian market than the requirements suggest," explained Denis Popov, managing expert at the PSB Center for Analytics and Expertise.

Fluctuations in the ruble exchange rate

According to experts, the cancellation of the mechanism in the short term will not cause sharp fluctuations in the exchange rate.

"[The repeal of the decree] does not mean at all that exporters will stop selling foreign exchange earnings,— Nikolai Dudchenko stressed.

At the same time, the ruble remains vulnerable due to foreign policy instability.

— A high level of geopolitical risks remains relevant and, in the event of an unfavorable combination of factors, may negatively affect the ruble exchange rate. Therefore, it is premature to completely abandon the stabilizing tools," Denis Popov believes.

How it affects the budget

The decline in exports and the change in the structure of foreign trade partners have already affected budget revenues. This is especially true for oil and gas revenues.

— The flow of incoming convertible currency into the country is now lower than before, due to reduced export volumes and changes in the composition of buyers. Most of them are now from the Global South. Therefore, the obligation to sell part of the foreign exchange earnings remains. If it is canceled, the ruble will weaken," said Vladimir Klimanov, director of the Center for Regional Policy at the IPEI RANEPA.

He added that with the current budget revenue structure, a weak ruble would lead to higher costs for servicing government obligations.

— A weak ruble is unprofitable not only for importers, but also for the government, which will have to bear additional costs. This is what determines the rigidity of the requirements for exporters," the expert emphasized.

What can be done

A number of experts advocate correcting the system rather than completely abolishing it. One possible option is to flexibly reduce the share of mandatory sales.

— To improve the system, it is quite acceptable to continue the practice of last year: to reduce the share of mandatory currency sales to reduce the costs of exporters, — said Popov.

He also recalled that the revenue sale mechanism is an important information tool that allows the government to track revenue dynamics in real time and make decisions promptly.