Russia has reportedly imposed additional currency controls as it seeks to stabilize the depreciating rouble. These measures restrict Western companies looking to divest their Russian assets from receiving proceeds in dollars and euros, according to sources familiar with the matter cited by the Financial Times.
Under these new government restrictions, international companies opting to exit Russia in the wake of its invasion of Ukraine are required to sell their assets in roubles. Firms insisting on foreign currency payments for their assets may encounter delays or potential losses in transferring these sums abroad.
The value of the rouble has steadily weakened since Russia’s intervention in Ukraine in February of the previous year, leading to international sanctions that significantly impacted the currency and Russia’s broader economy. This year alone, the rouble has lost more than 20% of its value against the US dollar, breaching the critical 100-rouble-to-dollar threshold in August.
In response, Russia elevated interest rates and introduced export controls, resulting in a temporary recovery. However, the 100-rouble mark was once again crossed in early October. The country’s central bank raised interest rates multiple times, including a more significant-than-anticipated increase to 15% last Friday. Currently, the rouble hovers around 92 to the dollar.
Several prominent international companies have withdrawn from Russia or scaled down their operations in the aftermath of the Ukrainian invasion, including Starbucks, McDonald’s, Shell, BP, and Carlsberg. Carlsberg, for example, experienced the temporary seizure of its stake in Baltika, its Russian subsidiary, following Vladimir Putin’s order.
Commenting on these developments, Carlsberg’s new CEO, Jacob Aarup-Andersen, affirmed that the company would not engage in any transaction with Moscow that might legitimize the expropriation of assets, asserting that their business in Russia had been “stolen.”
In response to these recent currency controls, Kremlin spokesperson Dmitry Peskov stated that the demand for Western companies leaving Russia to be paid in roubles was unrelated to the currency’s recent fluctuations. Peskov emphasized Russia’s commitment to creating favorable conditions for foreign companies and external investment.
The rouble’s recent challenges are attributed by Moscow to declining export volumes and increased domestic demand for imports.