MOSCOW (Reuters) – Russia’s central bank on Thursday approved Vladimir Putin’s decision to reimpose capital controls, a step it had been reluctant to take, preferring to raise interest rates to stem the sharp devaluation of the ruble .

Vladimir Putin signed a decree on Thursday reintroducing the mandatory conversion of income into foreign currencies for a list of 43 exporters, whose names were not disclosed.

Russia had imposed exchange controls to stop the fall of the ruble shortly after Moscow sent troops to Ukraine in February 2022. The fall of the national currency beyond the threshold of 100 rubles (0.9713 euros) for one dollar (0.9419 euros) led the authorities to consider returning to such measures.

Elvira Nabiullina, governor of the Central Bank of Russia, warned in September that this approach was not an effective response to the problem. However, on Thursday, the central bank gave its approval to new measures in a targeted form.

“The establishment of a mandatory repatriation and sale obligation of foreign currency income for a group of 43 companies can increase the efficiency of companies’ foreign currency sales, improve the liquidity situation and help reduce volatility of the market in the short term,” the Bank of Russia said in a statement.

The targeted nature of the restrictions, according to the bank, will not affect other companies engaged in foreign trade.

A senior official familiar with the discussions told Reuters it was time to reintroduce mandatory foreign exchange sales and that foreign exchange positions in the market needed to be settled.

The government said the new capital controls would last six months and companies would have to submit plans to the Bank of Russia and Rosfinmonitoring, Russia’s financial monitoring agency.

(Report by Elena Fabrichnaya and Alexander Marrow, by Augustin Turpin, edited by Kate Entringer)

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