Russia’s central bank advises companies to transfer ‘unfriendly’ currency holdings
Russian authorities and a leading brokerage on Thursday expressed concern over individuals’ and businesses’ holdings of US dollars and other so-called “hostile” currencies, calling for their conversion into alternative currencies and assets.
Western countries imposed unprecedented sanctions on Russia after it sent tens of thousands of troops to Ukraine on February 24, blocking Moscow’s access to global economic and trade systems.
The sanctions froze about half of Russia’s international reserves managed by the central bank, which on Thursday recommended ordering state-owned enterprises to shift their foreign currency holdings into the currencies of countries that have targeted Moscow with sanctions to those of countries that have not done so.
“The blocking of Russian assets by hostile countries, as well as operational restrictions on settlements in the world’s major reserve currencies, create risks for citizens and businesses when using the US dollar and the euro,” he said. the central bank said in a statement.
Russia calls countries that have deployed sanctions “unfriendly”. Russian households held about $85 billion in dollars and euros, Central Bank Governor Elvira Nabiullina said in July, adding that cash dollars would circulate in Russia even “in the most doomsday scenario.”
The Ministry of Finance said it shared the central bank’s concerns over corporate holdings of “hostile” currencies.
The bank also said it would introduce additional measures aimed at reducing bank operations in dollars and euros, accelerating a de-dollarization drive that officials hope can help protect Russia’s economy and citizens from certain restrictions. .
Yury Maslov, head of brokerage firm Otkritie Investment, which is part of the sanctioned Otkritie Group, said the company minimizes the share of dollars in the wallets of its clients, who for the time being retain the possibility of buy and sell the greenback.
“Euros can only be sold, not bought. Over time, dollars will also be available for sale, and eventually none will be available for sale,” Maslov said during a meeting with Otkritie’s brokerage clients at the Marriott hotel in downtown. Moscow.
“This applies to the perimeter of Russia as a whole. I recommend reducing the dollar amount. Buy Eurobonds, yuan, Hong Kong dollars… anything. But there is a high risk that at some point the dollar will no longer be an easily convertible currency.
The central bank also told companies it was important to resume publishing financial statements, while minimizing the risk of sanctions.
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