By Geoffrey Smith
Investing.com — The Russian Central Bank said it will cut the surcharge imposed on retail purchases of foreign exchange through brokers to 12% from 30%, fine-tuning the draconian restrictions it has imposed in the last week to defend the ruble.
In a statement, the CBR said the 12% surcharge will also apply to companies transacting through brokerages.
The central bank had imposed the new regulation on Thursday to stem the flood of demand for foreign currency as the ruble plummeted against the euro and dollar in response to Western sanctions. The ruble has fallen to a succession of all-time lows this week and has now lost nearly half its value against the dollar this year. By mid-morning in Moscow on Friday, the dollar had risen another 3.1% to 109.41, although that is still below Thursday’s 24-year high of 118.28.
The central bank has had the majority of its $643 billion of foreign reserves frozen by sanctions imposed by the U.S., EU, U.K., and Japan. That leaves it with relatively little capacity to defend the ruble against the kind of run that has been going on in Russia all week, which has seen long lines at bank branches and ATMs across the country.
FX brokerages, a common feature of Russian high streets, had initially offered ordinary citizens a way around the 30% surcharge that banks had immediately imposed in an attempt to stem outflows. That loophole is now closed.
Separately, the CBR kept Moscow’s stock exchanges shut for a fifth consecutive day on Friday. That triggered an announcement from Nasdaq-listed Yandex (NASDAQ:YNDX), Russia’s largest Internet services company, that it may default on its dollar debt.
Russian Central Bank Cuts Surcharge on Retail FX Purchases to 12% vs 30%
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