Russia Pass Decree of Rubles Account for Capital Control

Russian companies will be allowed to pay foreign creditors in rubles, according to a decree signed by President Vladimir Putin on Saturday in an attempt to stave off defaults enforcing capital controls.

The decree would set temporary rules for sovereign and corporate debtors to make payments to creditors from “countries that engage in hostile activities” against Russia, its companies and citizens.

The government noted it will prepare a list of such countries within two days.

In another separate announcement on Sunday, the Central Bank of Russia said it will temporarily ease reporting requirement for Russian lenders to ease off pressure from sanctions.

Governor Elvira Nabiullina told a news conference said,  “the central bank today increased its key rate to 20% as new sanctions triggered a significant deviation of the rouble rate and limited the central bank’s options to use its gold and foreign exchange reserves,”

“We had to increase rates to compensate citizens for increased inflationary risks.”