The Russian central bank has announced that it will be extending restrictions on financial transfers abroad by non-residents from ‘unfriendly’ countries for another six months, starting from October 1. This decision comes as a measure to maintain financial stability, according to a statement released by the Bank of Russia on Tuesday. The limits will apply to transfers from the accounts of both individuals and legal entities.
The initial introduction of these restrictions was made by the Bank of Russia in April 2022, and they were last extended in March of this year. Under a government decree, payments must be transferred to special bank accounts in rubles, known as C-type accounts, and are strictly prohibited from being sent abroad without special permission.
However, residents and non-residents from ‘friendly’ states, which refers to those countries that have abstained from imposing sanctions on Russia, are allowed to transfer a maximum of $1 million per month abroad. For money transfer systems, the amount is limited to $10,000. Non-resident individuals working in Russia, regardless of whether they are from ‘friendly’ or ‘unfriendly’ countries, are permitted to transfer funds abroad up to the amount of their monthly salary.
These restrictions on financial transfers are part of Russia’s response to the seizure of its state funds by Western financial institutions. In the previous year, Moscow froze the assets of international depositories in retaliation. Financial reports from Euroclear and Deutsche Borse Group revealed that Russia blocked 229.1 billion rubles ($2.3 billion) in assets belonging to Belgium’s Euroclear and Luxembourg’s Clearstream clearing houses.
The extension of these restrictions showcases Russia’s determination to protect its financial stability and ensure that its assets are not subject to further seizure. By limiting financial transfers abroad by non-residents from ‘unfriendly’ countries, the Russian central bank aims to safeguard its economy from external threats and maintain a strong domestic financial system.
It is worth mentioning that these measures also reflect Russia’s efforts to encourage international investors from ‘friendly’ countries, as indicated by a recent announcement that it may unblock the accounts of investors from such nations. This demonstrates that while Russia is taking steps to protect its financial interests, it is also open to fostering positive economic relationships and attracting foreign investment.
In conclusion, the Russian central bank has extended restrictions on financial transfers abroad by non-residents from ‘unfriendly’ countries for another six months, starting from October 1. These measures aim to maintain financial stability and protect Russia’s assets from potential seizure. However, residents and non-residents from ‘friendly’ states are allowed limited transfers abroad, and Russia is also considering unblocking accounts for investors from these nations. This highlights Russia’s dual approach of safeguarding its financial interests while actively seeking to foster positive economic relationships.
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