Is Russia really beating western sanctions?

Despite opposition from the central bank, Russia is pondering an indefinite extension of the wartime capital regulations that were implemented to relieve pressure on the ruble. The step, according to the administration, is necessary to support the currency and assist curb inflation.

President Vladimir Putin issued an order in October requiring 43 exporting company groups, including the nation’s major oil producers, to repatriate at least 80% of their foreign revenues in order to maintain a stable foreign exchange supply on the domestic market. 90% of that sum needs to be sold for rubles.

The regulations were in force until the end of April, at which point pressure from international sanctions over Russia’s war in Ukraine caused the currency to plummet to the psychologically significant threshold of 100 per dollar.

The measures, according to official statements, should be continued since they have proved successful in stabilizing the currency. With only a small impact on the foreign exchange market, the Bank of Russia replied that it saw “no compelling reason” to extend the currency controls.

Compulsory sales of foreign currencies prevent more instability in the ruble while Russia’s economy adjusts to global sanctions.

Western governments have been imposing sanctions on more than 15,000 Russian organizations and individuals since February 2022 in an effort to starve Russia of technology and cash while also reducing Russia’s revenue from energy and mineral exports. Russian income fell along with the global crude prices towards the end of 2023, although they were still $15.2 billion in November alone.

A growing fleet of concealed-ownership and -registration vehicles is reportedly used by Russia to transport 71% of its oil exports. Up to 1,400 ships, many of which were operating without insurance, were reportedly utilized to transport Russian oil in violation of Western sanctions.