As the six-month mandatory sale of foreign currency earnings approaches, discussions are intensifying in the financial bloc about the need to extend it. First Deputy Prime Minister Andrei Belousov said that the government supports this idea. The Central Bank is now expressing the exact opposite position, stating that today it does not see any compelling reason to extend the mandatory sale of foreign currency earnings.
Let me remind you that the measure was introduced in October against the backdrop of a severe fall in the ruble exchange rate caused by the passive position of the Central Bank. In this way, according to some experts, the regulator artificially created justifications to increase the key rate, which is what happened.
According to the government, the obligation to sell foreign exchange earnings while simultaneously tightening control over its real value stabilized the ruble exchange rate and ensured a sufficient level of foreign exchange liquidity. The activities of foreign trade intermediaries were brought under effective control, with the help of which individual unscrupulous companies hid a significant part of the currency, taking it offshore.
Specific economic results were reflected in the strengthening of the ruble exchange rate by 10%. This made it possible to guarantee the necessary physical volumes of imports, returning them to the 2021 level ($305 billion). At the same time, it became possible to purchase a range of critically important high-tech products and components through parallel imports in the interests of the state with their further reproduction by domestic industry.
A consensus has emerged in the government that foreign trade operations are not “free” and unregulated flows, but instruments of economic development and management. That is, it is not private interests and private economic behavior that is given complete and uncontrolled freedom. This is a reasonable symbiosis and compromise between the interests of society, citizens and business.
We must not forget that exports serve the function of funding imports. If foreign exchange earnings do not return to the country, but end up in foreign accounts, then the process of devaluation of the national currency may begin. Consequently, the prices of goods imported into the country will rise. Consumer imports will immediately accelerate inflation, and investment imports will reduce the volume of investments in the real sector of the economy.
Our position has always been simple: the mandatory sale of foreign exchange earnings must be a permanent, essential component of normal foreign exchange control. This should always be the case by default.
But there must be grounds for just the opposite action – government permission to leave some foreign currency amounts abroad for specific project and investment purposes.
The absence of this norm means a constant, endless and, in fact, uncontrolled withdrawal of capital abroad. With currency borders wide open, we will never have a stable, predictable, investment, reserve currency, or a sovereign store of value. That is, we will always be someone’s financial semi-colony.
They may tell us about “excessive restrictions and costs for business,” but any participant in foreign exchange trading knows that at least 80% of the turnover is purely speculative foreign exchange transactions. We have nothing against such transactions as such. But critically important macroeconomic conditions and parameters – and the national currency exchange rate is precisely that – should not be determined by the speculative interests of individuals.
In our opinion, if open currency borders are added to a tight monetary policy and a high interest rate, this could lead to a new (who knows how sharp) weakening of the ruble.
At the same time, the Central Bank should address a practical, but very sensitive issue for all exporters – limiting the size of the commission of commercial financial organizations for the mandatory sale of foreign currency earnings. Now it “jumps” on the market in the range of 4 to 10%, so it was reasonable to limit it to 2-3%.
The author is a candidate of economic sciences, deputy chairman of the State Duma
The editorial position may not coincide with the opinion of the author
#Revenue #helps