The MFB's claim was satisfied on April 1. The Supreme Court found the Central Bank's instruction on the mandatory sale of export proceeds to be in conflict with the laws on currency regulation, on the protection of competition in the financial services market, and the Civil Code. And yesterday the Central Bank suffered a final defeat: the Supreme Court's cassation panel upheld the previous decision. Mamontov calls it a victory for the entire country. For now, bankers are happy about this victory. "The decision is correct and long-awaited," says Sergey Chernyakov, head of the conversion operations department at Bank of Moscow, "trading volumes on the MICEX will be maintained if the exchange reduces the commission to the level of brokers on the interbank market ($20 from $1 million)." Igor Vasiliev, head of the currency and financial operations department at Alfa Bank, is glad that he can now save 0.06% on the commission. And Roman Shoshin, a dealer at MFB, notes that clients will not have to deposit currency before selling.

The Supreme Court yesterday rejected the Central Bank's cassation appeal, confirming the illegality of the provision on the procedure for the mandatory sale of export proceeds. Today, exporters' proceeds can already be sold on the interbank market, as was the case before the 1998 crisis. Bankers are clapping their hands: the MICEX commission for intermediary services can now be avoided. And the Central Bank will have to trade more actively with banks directly to influence the rate.

According to the procedure established by the Central Bank after the 1998 crisis and in effect until yesterday, export earnings could be sold directly to the Central Bank or on interbank currency exchanges. In this way, the Central Bank tried to concentrate currency flows in one place and cool the ardor of speculators. The winner was the MICEX, which exorbitantly increased the commission on the single trading session, where exporters were forced to hand over currency. In 1998, the daily turnover in the MICEX fixing system, where the official rate was set, was $30-40 million, and in 2001, an average of $113 million passed through the ETS per day with a commission of 0.06% of the transaction amount. Large exporters were unhappy, but the modest Moscow Stock Exchange entered into single combat with the Central Bank. First Vice President of the Moscow Exchange Alexey Mamontov is one of the founders of the Moscow International Currency Association (MICA), which has long been fighting the MICEX, defending the right of banks to sell export earnings to each other without intermediaries. In its claim to the Central Bank, filed with the Supreme Court, the MICEX wrote that it is also an exporter - it supplies information about trades to the Reuters agency. The MICEX claimed that it incurs losses when converting foreign currency earnings: it must pay the MICEX exchange commission, preliminary deposit freezes funds, and the rate on the ETS is usually lower than the rate on the interbank market.

The new rules are unlikely to have a significant impact on the exchange rate, since the supply of currency on the market will not decrease, says Artem Roshchin, a dealer at Alba Alliance Bank. Oleg Vyugin, First Deputy Chairman of the Central Bank, who used to work at Troika Dialog, commented on the first Supreme Court decision as follows: "Trades on the MICEX will still remain. Based on their results, the Central Bank will set the official rate, although it will be more difficult to regulate it. The Central Bank will have to tighten its monetary policy and regulate the money supply not only by buying and selling currency. In addition, the Central Bank will have to work more actively on the interbank market and, possibly, set firm quotes, as it did before the crisis." The market will soon find out whether the expert's thoughts coincide with the actions of the Central Bank official.

Meanwhile, liberals continue their attack on currency regulation. OMZ CEO Kakha Bendukidze told Vedomosti yesterday that the Supreme Court's decision has convinced him even more of the need to appeal to the Constitutional Court on behalf of the RSPP to prove that the mandatory sale of export earnings as such is unconstitutional.

You don't have to pay MICEX