(MENAFN) In response to ongoing economic challenges exacerbated by Western sanctions and geopolitical tensions, Russia has decided to extend a pivotal measure aimed at stabilizing its national currency, the ruble. The decision, announced on Saturday, entails prolonging the requirement for major exporters to convert the majority of their foreign currency revenues into rubles for an additional year until the end of April 2025.
This move comes amidst a backdrop of strict capital controls implemented by Moscow over the past two years, particularly in light of comprehensive financial sanctions imposed by Western powers following the conflict in Ukraine. With approximately 43 Russian major commodity groups affected, the extension mandates that at least 80 percent of their foreign currency earnings be converted into rubles.
According to a statement released by the Russian government, the decision is intended to bolster the stability of the exchange rate and fortify the resilience of the Russian financial market. The timing of this extension follows recent actions by Western nations, which froze around $300 billion of Russia's international reserves and imposed severe restrictions on its major banks' international trading activities.
These measures are seen as critical in bolstering demand for the Russian ruble during a period of heightened economic uncertainty. By preventing a potential currency crisis and averting significant financial instability, the extension of currency conversion requirements aims to mitigate adverse effects on the Russian economy.
Despite the gradual relaxation of controls observed throughout 2022 and 2023, the decision to extend these measures underscores Russia's ongoing efforts to navigate economic challenges and safeguard its financial stability amidst geopolitical tensions and external pressures.
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