Allow bank accounts in US dollars: Russian central bank governor wants to end capital controls

Because of western sanctions due to the Russian war against Ukraine, Russia is reacting with currency restrictions.

Allow bank accounts in US dollars: Russian central bank governor wants to end capital controls

Because of western sanctions due to the Russian war against Ukraine, Russia is reacting with currency restrictions. Central bank chief Nabiullina advocates that these could now be largely lifted. She also calls for a restructuring of the economy.

The head of the Russian central bank, Elvira Nabiullina, is in favor of an end to most of the capital controls introduced because of western sanctions. "We had a number of foreign exchange restrictions," Nabiullina said in St. Petersburg. "I think they should be abolished, most of them anyway." Russians should no longer be banned from maintaining bank accounts in US dollars or other foreign currencies.

Russia had introduced strict controls on foreign exchange transactions in response to Western sanctions over the war against Ukraine that began on February 24. For example, a ban on the export of foreign currency cash in excess of $10,000 was lifted to stop capital outflow from Russia and safeguard financial stability.

Nabiullina spoke out in favor of restructuring the economy at Russia's most important annual economic conference in St. Petersburg. A "substantial part" of Russian industry should work for the domestic market instead of relying on exports as a source of income.

At the same time, the currency guardian warned of the loss of access to technologies, which could undermine the Russian economy. Moscow must seek private initiatives to keep up with technological developments. A slide into a situation like that in the Soviet Union must be prevented, when the country had missed the technological connection to its western competitors.

President Vladimir Putin had earlier expressed confidence that Russia would prosper economically despite the West's harshest sanctions in modern history. However, the fundamentals of the $1.8 trillion Russian economy would need to be realigned.

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