Russia's central bank on Thursday endorsed President Vladimir Putin's decision to reimpose currency controls, a measure it had been reluctant to take, preferring higher interest rates to try and stem the rouble's sharp devaluation in recent months.
The Bank of Russia has hiked interest rates by a collective 550 basis points since July, as the rouble's weakening has added to already significant inflationary pressures, and it is widely expected to raise the cost of borrowing again on Oct. 27.
Central Bank Governor Elvira Nabiullina warned in September that such steps were an inefficient way to solve the problem, but on Thursday, the bank gave its blessing to new measures in a targeted form. headtopics.com
The targeted nature of the restrictions, it said, would leave others engaged in foreign trade unaffected. Another source said the step had been taken because the weak rouble feeds inflation, which is something you cannot hide before elections. Russia is due to hold a presidential election in March 2024.
Finance Minister Anton Siluanov said in early September that the central bank and his ministry had switched places, with the ministry now in favour of tougher measures and the central bank adopting a more liberal position.
