Russian ruble falls after central bank chief says most currency controls should be scrapped

• The Russian ruble fell Thursday after the central bank chief said most currency controls should be scrapped.
• "We have had a layering of currency restrictions. My opinion is that they should be taken down, most of them anyway," said Governor Elvira Nabiullina.

The Russian ruble fell Thursday after the Kremlin's central bank chief suggested stripping away most capital controls.

Speaking at an economic conference in St. Petersburg, Governor Elvira Nabiullina also said Russians should be able to have bank accounts that hold US dollars or other foreign currencies.

"We have had a layering of currency restrictions. My opinion is that they should be taken down, most of them anyway," she said, according to Reuters.

The ruble dropped about 4.5% Thursday, with the exchange rate hitting 55.38 to the dollar.

Nabiullina's comments come as the ruble pulled of a stark turnaround. After plunging to less than a US penny soon after Western sanctions were imposed for Russia's war on Ukraine, the ruble has soared on the back of strict capital controls.

The ruble rallied to a seven-year high in May against the US dollar, prompting Deputy Prime Minister Andrei Belousov to suggest weakening the currency.

Some capital controls have already been eased. In May for example, the share of foreign-exchange revenue that exporters must sell was cut to 50% from 80%. The central bank has also lowered interest rates, which were hiked earlier to prop up the ruble.

Meanwhile, Nabiullina also suggested that Russia should re-think the country's dependence on exports for revenue, and instead focus its industries on serving the domestic market.

She added that Western sanctions in response to the Kremlin's war on Ukraine would limit Russia's access to vital technology and potentially endanger the economy, echoing fears of Soviet-era slowdowns.