MOSCOW, December 16 (Sputnik), Alexander Mosesov — As Russia's rouble experiences its biggest slump since 1998, there is a risk of mild capital control measures being introduced in the country, research by Swiss bank UBS says.
"We assign a low probability of a regime of strict capital controls in the near term. But, the probability that a range of other restrictive measures will be looked into is high, in our view," a UBS research note, obtained by Sputnik News Agency Tuesday, reads.
UBS researchers also noted that the recent interest rate hike from 10.5 to 17 percent by the Russian Central Bank on Tuesday signals a "willingness to use orthodox policies before resorting to capital controls."
As for capital control measures, the introduction of which is seen as possible by UBS, they include the encouraged or compulsory sales of FX reserves, a temporary halt in trading in certain financial assets, restrictions on FX conversion and taxes on the proceeds of asset sales.
Touching upon the issue of rouble volatility, UBS researchers agree that "lower oil prices put additional pressure" on the Russian currency and that oil price recovery is needed for the rouble to stabilize.
In October, Head of the Russian Central Bank Elvira Nabiullina described the absence of capital control measures in the country as "an important achievement of the economic policy."
The Russian currency is heavily affected by a sharp decline in oil prices with the country’s budget largely dependent on energy exports and by sanctions, imposed on the country by the European Union, the United States and their allies over Russia's alleged involvement in the Ukrainian crisis.
