Russia Not Considering Currency Controls, Economy Minister Says

Russia isn’t discussing currency controls after a surprise rate increase failed to stem the ruble’s worst rout since 1998, Economy Minister Alexei Ulyukayev said.

When asked whether currency controls were considered at a meeting today outside Moscow today, Ulyukayev said “no they aren’t being discussed.”

“Of course the interest rate should have been raised sooner,” Ulyukayev, a former first deputy central bank governor, told reporters. The situation in the economy is “very complicated,” he said.

Central bank Governor Elvira Nabiullina attended the meeting at Prime Minister Dmitry Medvedev’s residence. Finance Minister Anton Siluanov and Kremlin chief economic aide Andrey Belousov were also among the participants.

Russia in 2006 became the only one of the biggest emerging economies to allow unrestricted flows of money across borders and the return of restrictions would undo one of the landmark reforms of Vladimir Putin’s second presidential term. The ruble plunged as much as 20 percent today, reversing an initial rally after the Bank of Russia increased interest rates by the most since its 1998 default. The central bank has spent more than $80 billion of foreign-exchange reserves fighting this year’s worst currency rout.

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