Monday, March 21, 2016

Russia cenbank softens stance on rule aimed at cutting forex exposure

The Russian central bank on Monday softened its stance on a new rule to help de-dollarise the banking system, postponing a requirement to set aside more capital against foreign currency loans and possibly exempting loans to exporters.

The central bank, on a campaign to cut forex exposure in the country's banking system, was set to require banks to put aside more capital against forex loans as of April 1.

Alexei Simanovsky, a first deputy governor of the central bank, said that all preparatory work may not be finished by the end of the month as discussions are ongoing and the rule may now come into force on May 1.

The discussion is about exempting loans to Russian exporters from the new requirement, Simanovsky told journalists on the sidelines of a conference of industrialists and entrepreneurs. The rule could potentially lead to higher interest rates,

"There is an inclination not to increase the requirement for exporters," Simanovsky said.

"There (should be) a certain threshold as for who should be considered an exporter and who should not. And then, there is the issue that forex revenues should cover the cost of servicing foreign loans."

The measure is one of many among the central bank's recent steps aimed at easing pressure on the Russian rouble. The central bank has already announced it will increase minimum reserve requirements from April 1.

Forex loans account for around a third of Russia's total banking portfolio, central bank statistics show. Forex lending is growing in nominal terms, the same data shows, but registered almost no growth last year in rouble terms because of the rouble's devaluation.

(Reporting by Oksana Kobzeva; Writing by Lidia Kelly, editing by Jason Bush)

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