Moscow Exchange (MOEX) has halted trading in
dollars and euros due to the latest round of sanctions imposed by the US, as
Washington attempts to control financial flows supporting Russia’s invasion of
Ukraine. The US Treasury has announced sanctions against Moscow Exchange Group
and its clearing agent, the National Clearing Centre (NCC), Reuters reported.
This latest move will effectively suspend all exchange
trading and settlement of deliverable instruments in US dollars and euros. The
central bank’s statement, issued on a public holiday, clarified that these
measures are intended to disrupt the financial mechanisms facilitating Russia’s
military supply chain.
Following this action, Russia’s central bank mentioned
that the official exchange rates for the dollar and euro will now rely on data
from over-the-counter trading, where transactions occur directly between
parties. Despite the trading halt, the central bank reportedly urged companies
and individuals can continue to buy and sell US dollars and euros through
Russian banks.
Additionally, Russia’s second-largest exchange, SPB Exchange, had already been subjected to sanctions in late 2023. These sanctions
prompted the exchange to halt foreign share trading temporarily and switch to
rouble-based settlements. For over two years, the Russian central bank had
reportedly been preparing for such scenarios, modeling various sanctions
impacts with forex market participants and infrastructure organizations.
This approach included discussions on mechanisms to
manage the rouble-dollar exchange rate, ensuring some level of stability even
if trading on the MOEX and the NCC was disrupted.
MOEX’s Previous Performance
In March, MOEX released its financial results for
February 2024, highlighting a remarkable growth in trading volumes compared to
the same period of the previous year, with the trading volumes on the
exchange’s markets jumping to RUB 111.4 trillion from RUB 83.6 trillion.
For the FX segment, which constitutes a significant
portion of MOEX’s activity, trading volume reached RUB 27.7 trillion,
representing a notable boost from RUB 19.4 trillion recorded in the
corresponding period of 2022. The report disclosed that in February, the spot trades
accounted for RUB 10.2 trillion, while swap trades and forwards amounted to RUB
17.5 trillion.
Moscow Exchange (MOEX) has halted trading in
dollars and euros due to the latest round of sanctions imposed by the US, as
Washington attempts to control financial flows supporting Russia’s invasion of
Ukraine. The US Treasury has announced sanctions against Moscow Exchange Group
and its clearing agent, the National Clearing Centre (NCC), Reuters reported.
This latest move will effectively suspend all exchange
trading and settlement of deliverable instruments in US dollars and euros. The
central bank’s statement, issued on a public holiday, clarified that these
measures are intended to disrupt the financial mechanisms facilitating Russia’s
military supply chain.
Following this action, Russia’s central bank mentioned
that the official exchange rates for the dollar and euro will now rely on data
from over-the-counter trading, where transactions occur directly between
parties. Despite the trading halt, the central bank reportedly urged companies
and individuals can continue to buy and sell US dollars and euros through
Russian banks.
Additionally, Russia’s second-largest exchange, SPB Exchange, had already been subjected to sanctions in late 2023. These sanctions
prompted the exchange to halt foreign share trading temporarily and switch to
rouble-based settlements. For over two years, the Russian central bank had
reportedly been preparing for such scenarios, modeling various sanctions
impacts with forex market participants and infrastructure organizations.
This approach included discussions on mechanisms to
manage the rouble-dollar exchange rate, ensuring some level of stability even
if trading on the MOEX and the NCC was disrupted.
MOEX’s Previous Performance
In March, MOEX released its financial results for
February 2024, highlighting a remarkable growth in trading volumes compared to
the same period of the previous year, with the trading volumes on the
exchange’s markets jumping to RUB 111.4 trillion from RUB 83.6 trillion.
For the FX segment, which constitutes a significant
portion of MOEX’s activity, trading volume reached RUB 27.7 trillion,
representing a notable boost from RUB 19.4 trillion recorded in the
corresponding period of 2022. The report disclosed that in February, the spot trades
accounted for RUB 10.2 trillion, while swap trades and forwards amounted to RUB
17.5 trillion.
