Russia relaxes rules on foreign exchange buying as ruble rallies

Russia will relax temporary capital control measures aimed at limiting a drop in the ruble by allowing individuals to buy cash foreign currency and will also scrap commission for buying forex through brokerages, the central bank said on Friday.

The ruble has rebounded on the Moscow Exchange from record lows in March to levels seen before February 24 when Russia started "a special military operation" in Ukraine, as capital control measures suffocated demand for forex.

The central bank said banks will be allowed to sell cash foreign currency to individuals from April 18 but only the notes they have received no earlier than on April 9.

The central bank is also scrapping its requirement for banks to limit the gap between prices at which they offer to buy and sell foreign exchange. But it recommended banks sell forex to import-focused companies at a rate of no more than two rubles above the market rate.

The central bank said individuals will be allowed to withdraw not only dollars but also euros from their accounts from April 11, but kept the maximum amount that can be withdrawn until September 9 at the equivalent of $10,000.

The central bank also said it will scrap a 12-percent commission for buying foreign currency through brokerages, confirming earlier reports by Tinkoff Bank and Alfa Bank.

The central bank introduced a 30-percent commission on buying forex for individuals in early March. The commission was later lowered to 12 percent.

Restrictions on buying forex together with the order for export-focused companies to convert 80 percent of their FX revenues helped the ruble regain ground. On Friday, the ruble hit its strongest level against the euro since June 2020 and jumped to a 2022 high against the dollar.

The move to scrap the commission along with the central bank's decision to cut its key rate to 17 percent should lower the ruble's volatility, VTB Capital analysts said.

(Reuters)