From March 9 to September 9, 2022, the Central Bank (CB) of Russia introduced temporary changes to operations with cash currency, limiting the amount for withdrawal from a foreign currency account to ten thousand dollars in cash. This is reported on website regulator.
All client funds on foreign currency accounts or deposits are saved and accounted for in the deposit currency, the client can withdraw up to 10 thousand US dollars in cash, and the rest of the funds – in rubles at the market rate on the day of issue
Central bank explanation
As the regulator explained, during the period of the temporary order, the currency will be issued in US dollars, regardless of the currency of the account. Conversion of other currencies to USD will be at the market rate on the date of issue.
10one thousand dollars
the maximum amount for withdrawal from a foreign currency account in the period from March 9 to September 9
The remaining funds from the foreign currency account can be withdrawn in rubles at the market rate on the day of issue. It is determined on the basis of data on the weighted average rate of the respective currencies, calculated on transactions concluded at organized auctions on the day preceding the day of issuance. You can get the currency at the cash desk of the bank.
At the same time, the Central Bank clarified that about 90 percent of foreign currency accounts in Russian banks do not exceed the amount of ten thousand dollars. This means that most holders of foreign currency deposits or accounts will be able to receive their funds in full in cash.
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What will happen to the accounts?
The Central Bank assured that Russians can continue to keep money in foreign currency deposits or accounts, all funds are saved and accounted for in the currency in which the account or deposit was opened, and the conditions for them will not change. Interest on deposits will be calculated, as usual, in the currency in which the deposit was opened.
In addition, citizens will be able to open new foreign currency accounts and deposits, however, it will be possible to withdraw funds from them, while the temporary procedure is in effect, in rubles at the market rate on the day of issue. Also, during this period, banks will not sell cash to citizens. It will be possible to exchange cash currency for rubles at any time and in any volume.
Clients of all banks, without exception, can receive funds from their foreign currency deposits or accounts. However, banks may take several days to bring the required amount in cash to the branch.
Sber’s comment
Against the backdrop of the new temporary rules of the Central Bank, Sber reported that it was working regularly and was ready to meet the needs of customers in cash.
The credit institution emphasized that the purchase of non-cash currency is available to customers in the Sberbank Online application without restrictions. Customer funds in rubles are also available without restrictions, the bank added.
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Withdrawal of currency abroad
On March 5, the Central Bank introduced restrictions on the withdrawal of foreign currency abroad. Now it will be possible to transfer to spouses, as well as parents, children, grandparents and grandchildren, including adoptive parents and adopted children, no more than five thousand dollars a month.
This restriction has become another measure of the Central Bank and financial authorities aimed at maintaining foreign currency in the country under the sanctions imposed by Western countries. They, in particular, include the blocking of foreign exchange reserves of the Central Bank, denominated in dollars, euros, pounds and yen, and a ban on transactions with them.
Foreign exchange ban
In addition, since March 2, Russian residents have been banned from transferring foreign currency to their own foreign accounts and taking out cash in excess of $10,000. The corresponding decree was signed by Russian President Vladimir Putin.
According to the document, these measures were taken in connection with the unfriendly and contrary to international law actions of the United States, as well as the states and organizations that joined them. It is noted that the measures taken are aimed at protecting Russian national interests.
As explained in the press service of the Kremlin, it is forbidden to export from the country cash foreign currency and monetary instruments in foreign currency for an amount that exceeds the equivalent of 10 thousand US dollars and is calculated at the official rate of the Central Bank set on the date of export. Press Secretary of the head of state Dmitry Peskov explained that such decisions will help minimize the risks and consequences and insure citizens from rocking the economy.
This happens because it is necessary to take action: there are certain actions of a hostile nature that are trying to shake and undermine the integrity of our economy. (…) In such conditions, since these unfriendly measures are unprecedented, it is necessary to act firmly, thoughtfully and clearly
In addition, on February 28, Russian residents were prohibited from issuing foreign currency loans and credits to non-residents, as well as transferring foreign currency to their own foreign accounts. In addition, the sale of 80 percent of foreign exchange earnings in the domestic market is obligatory.
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key rate
On February 28, the Board of Directors of the Central Bank decided to raise the key rate to 20 percent per annum due to a fundamental change in external conditions.
As Elvira Nabiullina, the head of the regulator, explained, the new foreign sanctions led to a significant change in the ruble exchange rate and limited the possibility of using gold and foreign exchange reserves. “This requires the use of a wide range of instruments to maintain financial stability,” she said, adding that in order to maintain the attractiveness of deposits and protect savings from depreciation, interest rates must be raised to levels that compensate citizens for increased inflationary risks.
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