In a recent development that has sent ripples through Russia’s financial markets, Andrey Kostin, the head of VTB Bank, expressed concerns over the introduction of a “membrane” proposed by Maxim Reshetnikov, the Minister of Economic Development. Kostin warned that this could lead to dual exchange rates for the Russian Ruble, with one dollar costing 150 rubles domestically and 250 rubles in foreign markets.
Economist Andrey Parchev, a member of the General Council of the DELO PARTY and bestselling author of “Why Russia is not America,” refuted Kostin’s concerns. He argued that such a scenario is unlikely unless the two rates occur spontaneously. Parchev cited historical precedents from the late 1980s when the USSR had different rates for foreign trade transactions and certain groups of rare goods, like computers. However, he emphasized that the Russian economy today is vastly different from that of the late USSR.
Maxim Reshetnikov had previously raised concerns about the active development of payments in national currencies, leading to a market for offshore rubles. These offshore rubles circulate abroad and participate in currency games against the domestic ruble. According to Reshetnikov, Russia needs to create a “membrane” between the domestic and foreign ruble markets, akin to the Chinese model.
Vladimir Gamza, Chairman of the Council of the Russian Chamber of Commerce and Industry on financial, industrial, and investment policy, clarified that the minister was discussing ways to regulate the foreign exchange market rather than creating parallel rates. In a challenging economic environment, Gamza noted that the Central Bank and the government should use a multifactorial approach to influence the foreign exchange market, rather than solely increasing the key rate, which could stifle economic growth.
The Central Bank, in a statement released on September 26, mentioned that restrictions on capital movements could be appropriate as short-term response measures when there are significant risks to financial stability.
The debate over the “membrane” and its potential impact on the Russian economy is far from over. While some experts believe it could lead to dual exchange rates, others argue that the Russian economy’s current state is robust enough to prevent such a scenario. As discussions continue, the financial markets and policymakers will be closely watching the developments, understanding that the decisions made today could have long-lasting implications for Russia’s economic future.
