Putin Rules Out Capital Controls As Ruble Hits Record Lows, “Curbs Risk” By Shifting To Non-Dollar Settlements

Despite ongoing outflows, Russian President Vladimir Putin confirmed earlier statements by the Central Bank ruling out any measures to stop the flow of money from his nation (following rumors that they were weighing capital controls sent the Ruble to fresh record lows against the USD). The central bank continues to make “small interventions” but the Ruble has pushed to new record lows this morning nevertheless, as Bloomberg reports, restating “the first principle is the lack of limits on capital movements.” In order to “curb risks” from ongoing outflows, Putin said on Thursday that Russia wants to shift to national currencies in trade deals with China and other countries, implying a shift away from the U.S. dollar. That appears to be strengthened further this morning as Putin signs law ratifying a Eurasian economic union.

Following rumors of capital controls, Bloomberg reports Putin denying any such rumors…

President Vladimir Putin joined the central bank in ruling out measures to hinder the accelerating flow of money from Russia after speculation that policy makers are weighing the possibility of capital controls sent the ruble to a record low.

“We don’t plan to introduce currency restrictions or restrictions on the movement of capital,” Putin said today at a Moscow investment forum organized by VTB Capital.

His comments echo central bank Chairman Elvira Nabiullina, who earlier told the same conference that speculation policy makers are considering limits on capital movements is “absolutely baseless.”

And amid ongoing weakness in the Ruble (new record lows)

The Central Bank is sticking by its principles…

The central bank made “small” interventions yesterday, selling “slightly more than” $4 million, Nabiullina said. “The ruble is close to our upper boundary and we, subject to its moves, will act according to previously set rules.”

Even as the ruble has weakened to a record, the bank has pushed forward with preparations to shift to a freely floating currency, in favor of using interest rates to manage inflation, which has remained above its target for two years.

Nabiullina said capital controls would undermine one of the country’s main monetary-policy achievements.

“On what principles are we basing our policy? First is the lack of limits on capital movements,” she said. “To reject that achievement, truly, may set us back many years.”

As Reuters adds, Putin is looking to further de-dollarize…

Russian President Vladimir Putin said on Thursday that Russia wants to shift to national currencies in trade deals with China and other countries, implying a shift away from the U.S. dollar.

“In the future we aim actively to use national currencies in energy resources trade to settle… international trade accounts, with China and other counties,” Putin told an investment conference. “In using national currencies, we see a serious mechanism for curbing risks.”

Which appears to be strengthened this morning…