Russian Lawmakers Propose FX Revenue Sales to Halt Ruble’s Drop

Russian Lawmakers Propose FX Revenue Sales to Halt Ruble’s Drop

Lawmakers from Just Russia, the third-biggest party in parliament, proposed mandatory sales of foreign-currency revenue as the ruble weakened to a record and the economy slows.

The bill would require Russian companies to sell as much as half their foreign earnings within seven working days after they hit their bank accounts, according to a draft submitted by five lawmakers to the State Duma. The central bank would be allowed to set the level at less than the 50 percent maximum.

The Bank of Russia failed to halt the ruble’s slide with an increase of its main interest rate to 10.5 percent yesterday. The currency has lost almost 43 percent against the dollar this year as the conflict in Ukraine and oil trading at a five-year low take their toll on the world’s biggest energy exporter, pushing it toward its first recession since 2009.

The central bank reiterated that it’s against administrative restrictions, especially mandatory sales of foreign-currency revenue, the monetary authority’s press service said in response to an e-mailed request.

Russia is urging exporters such as state-controlled oil producer OAO Rosneft to convert more of their foreign revenue into rubles to ease pressure on the currency. The Finance Ministry proposed the government have its representatives on corporate boards initiate talks on currency-sales policies, Deputy Finance Minister Alexei Moiseev told reporters in Moscow Dec. 4.

President Vladimir Putin said Nov. 10 at the Asian Pacific Economic Cooperation summit in Chinathat Russia doesn’t plan to impose restrictions on capital flows.

The ruble is the world’s worst performer this year after Ukraine’s hryvnia among more than 170 global markets tracked by Bloomberg. It traded 2 percent weaker at 57.5430 per dollar at 6:30 p.m. in Moscow.

In 2006, the central bank made the ruble fully convertible by scrapping currency controls and easing restrictions on investors. Before then, the regulator required that companies use special accounts and collateral to transfer funds.

“Emergency measures are needed to support the national currency” and reduce the impact of deprecation, such as higher food prices and an increased cost for the same standard of living, according to the bill.

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