Russia allows banks to sell foreign currency to citizens except dollars and euros amid war

Amid the ongoing war with Ukraine and escalating sanctions on Moscow, the Russian Federation decided on Thursday to lift restrictions on the sale of cash currencies except dollars and euros. It was announced that except for euros and dollars, Russian banks can sell foreign currencies in cash to individuals without limitation from May 20.

The Central Bank of Russia has issued a statement stating that except for US dollars and euros, banks will be free to sell foreign money in cash to citizens without limitation from May 20, 2022. It also said current restrictions on the sale of US dollars and euros remain in place and residents can only buy US dollars and euros that arrived at bank tills on April 9, 2022, until September 9, 2022. He said further stated that permission to sell currency other than US Dollar and Euro without limit is due to bank holdings of foreign banknotes. The statement also informed that previously the Central Bank had clarified that these prohibitions extended to all types of monetary currency.

The Bank of Russia decided in March to limit the ability of credit institutions to sell cash to citizens due to the high volatility of the ruble exchange rate, according to TASS. The regulator eased restrictions on April 18 and banks were allowed to sell cash to citizens until September 9, but only money that arrived at banks after April 9.

Inflation in Russia hits its highest level in two decades

Meanwhile, inflation in Russia hit a two-decade high of 17.8% in April, from 16.7% in March, but some indicators indicate it is declining and will continue to do so, and the Russian ruble has risen from a low in March to become the best performing currency this year, according to CNBC. Despite Western sanctions freezing large swaths of Russia’s reserves, economic activity indices are rising and the country has so far avoided defaulting on its foreign currency debt. On the other hand, Denis Manturov, who is Russia’s Minister of Industry and Trade, said that cryptocurrencies will be legalized as a payment method in the country “sooner or later”.