Kremlin leader Vladimir Putin has signed a decree allowing new foreign investors to put money into Russia without restrictions on capital outflows.

Source: Bloomberg

Details: The decree permits investors from abroad – including those from so-called "unfriendly" countries – to invest in Russian financial assets without having to place their funds in blocked Type C accounts.

Foreigners investing in Russian securities for the first time will now be able to use Type IN accounts, enabling them to repatriate profits freely. However, restrictions remain in place on already frozen assets.

Since the start of the full-scale war, Russia has imposed capital controls and frozen tens of billions of dollars in foreign assets. The new decree aims to attract more foreign currency amid financial pressure and sanctions.

The new rules do not apply to existing investors, whose assets remain blocked in Type C accounts.

Background:

• Earlier, Bloomberg reported that Russia’s economy is facing deeper challenges than officially acknowledged, with a real risk of a systemic banking crisis within the next year.
• Russian authorities are seeking a gradual devaluation of the rouble to around 100 per US dollar to boost budget revenues, Reuters says.
• Elvira Nabiullina, Governor of the Central Bank of Russia, stated that the resources which enabled Russia’s economy to grow over the past two years despite its full-scale war against Ukraine and international sanctions have now been depleted.

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