The head of the Bank of Russia Elvira Nabiullina announced the abolition of foreign exchange restrictions in Russia, which should lead to a sharp weakening of the ruble. She linked the speed of lifting the restrictions imposed after the start of the war with Ukraine with the stabilization of the financial system. The words of the head of the Central Bank are quoted by the Interfax agency.

“As the financial system stabilizes, these restrictions are gradually eased. My opinion is that they should be removed, most of them anyway, ”said the head of the Central Bank during the St. Petersburg International Economic Forum (SPIEF).

Nabiullina noted that in connection with the sanctions and the freezing of Russian reserves, the regulator had an extremely limited functionality of currency regulation, which is why the Central Bank had to introduce strict currency restrictions. She explained that the freezing of reserves effectively deprived the regulator of the ability to respond to a sharp outflow of capital through foreign exchange intervention, so it was decided to prohibit non-residents from selling assets and withdrawing funds abroad.

Nabiullina also hastened to reassure citizens, assuring that foreign currency deposits, as well as the circulation of foreign currency, would not be prohibited. The dollar, euro and other currencies, according to the head of the Central Bank, will not be banned, no one will confiscate foreign currency deposits.

Strict currency restrictions, which were introduced by the regulator after the freezing of the Central Bank's reserves, led to a sharp strengthening of the ruble: the dollar fell by half from a peak of around 120 rubles to the level of 56 rubles. The overly strong ruble exchange rate has become a real problem for the Russian economy, as the Russian budget was drawn up at an average annual rate of around 72 rubles to the dollar. A strong ruble deprives Russia of income, analysts estimate the optimal dollar exchange rate in the range of 65-75 rubles.