Russia is trying to stop Western companies from fleeing the country

The capital control, designed to stop the eviction, was announced by Russian Prime Minister Mikhail Mishustin, state news agencies TASS and RIA reported on Tuesday. Western companies are making decisions because of “political pressure”, he said, and they will be prevented from selling Russian assets until that pressure subsides.

“In order to enable businesses to make informed decisions, a draft presidential decree has been prepared to impose temporary restrictions on exiting Russian assets,” Mishustin was quoted as saying by BTA. “We expect that those who have invested in our country will be able to continue working here.

Oil giant BP (BP) is one of the most famous companies to leave Russia after its troops invaded Ukraine last week. He said on Sunday that he planned to leave his 19.75% stake in Russia’s largest oil company, Rosneft, and their joint ventures, one of Russia’s largest foreign investments.
Since then, others have followed suit, incl Shell (RDSA) and the Norwegian Equinor.
France’s TotalEnergies said on Tuesday it would not provide new capital for Russian projects and assessed the impact of harsh Western sanctions on existing investments in the country.

Major global investment funds are joining companies in trying to dump Russian assets. The $ 1.3 trillion Norwegian sovereign wealth fund will sell shares in 47 Russian companies as well as Russian government bonds, the Norwegian prime minister said on Sunday.

Russia has struggled to prevent a financial meltdown since the United States, the European Union and other Western allies imposed sanctions on much of the country’s banking system, including freezing hundreds of billions of dollars in foreign reserves Moscow has amassed for years to protect Russia’s economy. Analysts say the measures could lead to a banking crisis.

The roll fell by about 25% on Monday and now costs about one US cent. It has lost about half its value since Russia first invaded Ukraine in 2014, annexing Crimea and triggering much more limited sanctions. Russia’s stock market was not open for trading this week, but shares of Russian companies listed abroad have plummeted.

Russian authorities have already taken urgent measures to try to stabilize the financial system. The central bank has more than doubled interest rates to 20% and temporarily banned Russian brokers from selling securities held by foreigners. The government has ordered exporters to exchange 80% of their foreign exchange earnings for rubles and banned Russian citizens from making bank transfers outside Russia.

“I am sure that the sanctions pressure will eventually subside and those who will not limit their projects in our country, succumbing to the slogans of foreign politicians, will win,” Mishustin said.