Sergey Drobyshevsky: "The extension of the decree on the mandatory sale of foreign exchange earnings will not have a big impact on the ruble exchange rate"

"The sale of foreign exchange earnings by exporters is a tool for rapid response to changes in the current account and the domestic foreign exchange market situation. At the same time, the fundamental conditions — large-scale economic and financial sanctions, problems with international settlements and the lack of a liquid domestic foreign exchange market — still prevail. For this reason, the Government needs to have at hand available tools for current regulation and operational influence on the foreign exchange market. The adoption of a new Executive Order of the President is a more time-consuming and approval-intensive process than the issuance of a government decree. So, the decision to extend the Decree with a simultaneous zeroing of the norm by means of a Government Decree allows both to preserve the existing regulatory instruments and take into account the current situation with the ruble exchange rate.

From my point of view, the extension of the Decree is not an uncertainty factor for businesses, because businesses are already used to and understand the conditions under which the Government changes the norms for the sale of foreign exchange earnings, and the extension of the Decree is sooner a signal that the authorities' policy towards exporters and the foreign exchange market will not change, but will be based on the same principles as before.

In terms of the foreign exchange market and the ruble exchange rate, extending the Decree and maintaining the zero sales rate will indeed have a small impact. Firstly, I think this decision was expected by most market participants, and they have already factored it into their expectations regarding the dynamics of the ruble exchange rate and rebalanced their portfolios. Secondly, since the norms have remained unchanged, this will not affect the supply of currency in the market, which is now determined mainly by the domestic needs of exporting companies in rubles for making payments within the country. Accordingly, in my opinion, the reaction of the market and the exchange rate would be minimal if the Decree were canceled," the expert said.