18 June 2004 14:34
Russia`s currency market becomes more liberal
[Presenter] A significant number of restrictions on operations with foreign currency was lifted in Russia today [18
June], including those on the export and exchange of foreign currency. A new law entered into force. It has already been
described as extremely liberal. Oleg Ptashkin has the details.
[Correspondent] The new law on currency regulation and control, which entered into force today, should radically
change the situation on the banking market. Experts say that this is the most liberal law. According to it, there will
be no restrictions on any operations with foreign currency. Reform will be completed by 2007 when all control will be
removed. It seems everybody is content with such measures.
[Passage omitted: experts praise the law]
[Correspondent] There is understanding, but the rules are still unclear. The Central Bank never provided banks with
work instructions. Bankers cannot even inform their clients about the new procedure for submitting their documents. In
addition, the law does not set out the functions of the customs, which controls financial flows. Now it is up to the
banks. They are not paid for this, but demand will be great.
[Pavel Medvedev, deputy head of the parliamentary Committee on Credit Organizations and Financial Markets] This is a
terrible headache for those working in banks, because from now on currency assets must be accounted for in a different
way.
[Correspondent] Ordinary people, according to the new law, can export hard currency without any documents. But the
sum should not exceed 10,000 dollars. They can also open accounts in any bank in the world. The local tax authorities
have just to be informed. However, not many people will be able to make use of the innovation.
[Yevgeniy Yasin, captioned as senior scientist of the high school of economics] Permission to open an account must be
requested if you want to deposit at least 75,000 dollars. Generally speaking, not many people will be able to do
that.
[Correspondent] Nobody denies that the law is aimed primarily at big corporations. There is no fear of capital
flight. Russia failed to prevent the export of capital even when strict control was in place. So the state has to take
the risk.
[Yasin] Those countries that are open to capital movement attract more investment. In this respect, the situation is
generally positive.
[Correspondent] Russian banks now establish their relations with their foreign counterparts on their own. The state
has taken the role of an observer from the sidelines. In this situation, any mistake by a bank could cost it dearly.
They hope for one thing only. This law is transitional, which means that there is time for making amendments until
2007.
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