Moscow orders state-owned exporters to sell foreign currency

The Russian government has ordered five large state-owned exporters including Rosneft and Gazprom to sell their foreign currency reserves in an attempt to prop up the rouble.

In a directive published on Tuesday, the boards of the five were told to meet and pass a resolution committing to sell down their reserves so that by the start of March they held no more foreign currency than at the start of October.

After then, they should maintain foreign currency reserves at the same level, said the directive addressed to government representatives on the boards of Rosneft, Gazprom and Zarubezhneft, the energy groups, and Alrosa and Kristall, the diamond producers.

"The specified companies should submit on a weekly basis a report to the Bank of Russia on the size of their foreign currency holdings," the directive said.

It did not say how large the dollar sales implied by the order were anticipated to be, but Kommersant, a Russian business daily, said the exporters may have to sell a combined $1bn a day until March.

The rouble was 1.1 per cent stronger on Tuesday at 54.84 per dollar. It has strengthened 31 per cent from a record low last week amid announcements of government and central bank measures to stem panic in Russian markets.

The plan follows a meeting last week when Dmitry Medvedev, the prime minister, agreed with the heads of big exporters that the government should play a greater role in co-ordinating state companies' currency sales. Mr Medvedev tasked Igor Shuvalov, deputy prime minister, to monitor their forex operations daily with the central bank and Federal Financial Monitoring Service.

The directive forcing state exporters to reduce their dollar holdings amounts to a soft form of the capital controls the government has pledged not to introduce.

Officials insist private companies will not be given orders on how and when to convert their dollar earnings into roubles. But Mr Medvedev appealed to the oligarchs at the meeting last week to manage their forex operations in a "responsible" manner.

"They are being convinced," said one official last week. "There were no threats of sending anyone to Siberia, just explanations that they would act in a way that is not speculative."

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