The Central Bank of Russia has issued a new order on Wednesday that immediately suspends banks from selling foreign currencies (forex) until September 9. This move came when the ruble has plunged against the US dollar after the rampant economic sanctions from the west on Russia.
“Banks will not sell cash to citizens during the term of the temporary order,” the Russian central bank said. However, the exchange of forex for the Russian ruble is allowed.
Ruble shed more than 30 percent of its value against the US dollar in the last two weeks as the United States, the United Kingdom and the European Union imposed heavy sanctions on Russian financial institutions. The EU even banned seven Russian commercial banks from accessing SWIFT, thus further cutting the country from the western financial system.
Cap on FX Withdrawals
The latest order said that forex bank accounts in Russia can only withdraw up to $10,000 in cash, while any amount beyond that should be converted into ruble for withdrawal.
However, the Russian central bank pointed out that around 90 percent of forex accounts in Russia hold less than $10,000. So the order will not have a mass impact on the retail industry,
Further, all foreign currency account withdrawals between March 9 to September 9 will be made in US dollars, irrespective of the holding currency of the account. “Conversion of other currencies to USD will be at the market rate on the date of issue,” the central bank said.
“Citizens can continue to keep funds in foreign currency deposits or accounts. All funds are kept and accounted for in the currency in which the account or deposit was opened,” the Central Bank of Russia added. “The conditions for the deposit or account do not change.”
