Russian ruble drops with capital controls in the spotlight

An illustration shows Russian ruble banknotes of different denominations on a table in Warsaw, Poland January 22, 2016. REUTERS/Kacper Pempel/File Photo

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April 14 (Reuters) – The Russian ruble weakened on Thursday, pushed by expectations that Russia could further ease its temporary capital controls, as stocks fell as the country continued what it calls “a special military operation” in Ukraine.

Russia’s central bank is considering easing requirements for mandatory sales of foreign currency earnings by export-oriented companies, business daily Vedomosti reported, citing a central bank official.

Currently, Russian exporters are forced to sell 80% of their foreign exchange earnings within the first three days of receiving them under a rule set by President Vladimir Putin in late February to limit ruble volatility amid sanctions. Western.

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At 07:39 GMT, the ruble fell 2% to 81.50, moving away from its highest level since November 11, 71 reached last week.

Against the euro, the ruble lost about 2.5% to 88.55 after briefly crossing the 90 mark.

The ruble eased this week after the central bank scrapped a 12% fee for buying foreign currency through brokerages and promised to lift a temporary ban on selling foreign currency for cash to individuals from April 18.

But the ruble retains support from export-oriented companies that are still forced to sell their foreign exchange earnings domestically.

The dollar-ruble pair is likely to remain in a range of 79-81 per dollar, Promsvyazbank said.

Russian actions in Ukraine remained in focus, along with a risk of further Western sanctions and expectations that the economy is heading for its biggest contraction since 1994.

Inflation has already accelerated to its highest level since February 2002, reaching 17.5% in annual terms on 8 April. find out more

Russian stock indices were down.

The dollar-denominated RTS index (.IRTS) slipped 3.2% to 965 points. Russia’s ruble-based MOEX index (.IMOEX) was down 1.2% at 2,497.8 points.

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Reuters reporting; edited by Uttaresh.V

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