MOSCOW, March 2 (Reuters) – Russia’s central financial institution mentioned on Thursday that it will prolong capital controls affecting overseas foreign money withdrawals and transfers overseas, warning that some financial sectors continued to really feel the pinch from sanctions regardless of their resilience.
Russia’s financial panorama modified drastically after it despatched tens of 1000’s of troops into Ukraine final February, as Western sanctions minimize its greatest banks from the SWIFT world funds community, curbed its entry to expertise and restricted its oil exports.
The central financial institution and the federal government responded with sweeping capital controls, together with a ban on sending overseas foreign money overseas to shore up the rouble and stabilise its banking sector.
Central Financial institution Governor Elvira Nabiullina, talking at a banking discussion board close to Moscow, mentioned that whereas many of those restrictions had been lifted or eased, present financial situations meant that a number of would stay in place.
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“Deadlines for restrictions like limits on withdrawing money foreign money from financial institution accounts, cash transfers overseas, and restrictions on withdrawals by non-residents from ‘unfriendly’ international locations are approaching,” she mentioned.
“All of them can be prolonged.”
Russia’s economic system has proved remarkably resilient within the face of robust Western sanctions, however analysts nonetheless predict a 1.9% drop in financial output in 2023, after an estimated 2.1% slide in 2022.
‘SYSTEMIC RISKS’
Nabiullina warned of “systemic dangers” to the banking sector as lenders scrambled to make up for final yr’s droop in income, however performed down the impact of the most recent spherical of Western sanctions.
The US and Britain final week added a number of Russian banks to their sanctions lists, whereas the European Union booted extra banks from SWIFT, amongst them on-line lender Tinkoff and the non-public Alfa Financial institution.
This was not a shock to the monetary system, Nabiullina mentioned. “In comparison with banks that have been beforehand hit by sanctions, they’re comparatively small and have had time to organize when it comes to decreasing the belongings that may be blocked.”
These sanctioned final week have responded in a largely relaxed method, with some saying disruption can be restricted and others proscribing overseas foreign money transactions or suspending euro buying and selling on brokerage accounts.
Writing by Caleb Davis; Modifying by Mark Trevelyan and Tomasz Janowski
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