Will the Central Bank lift restrictions?
I was interested to read last week that the Russian Central Bank is considering lifting foreign currency restrictions for open-ended investment funds. According to Vedomosti, industry leaders in Russia are pushing for the Central Bank to relax restrictions on funds investing in foreign markets.
At present only funds of funds can solely invest in foreign currencies, whilst with all other funds, such investments can’t exceed 70% of their portfolio. The representatives of the securities regulatory body, Naufor, argue that these regulations hinder the creation of mutual funds, as well as stalling the diversification of investments by Russian organisations. This is particularly pertinent at a time when a shrinking Russian fund market is facing increasing prices in foreign operations.
Even if these tight reins on points of investment are relaxed (and that’s a big “if”), I would agree with the Vedomosti journalist, Yulia Orlova, that it’s unlikely the Central Bank will heed to another key industry demand of accepting payments in foreign currencies.