Following new sanctions imposed by the United States aimed at impeding Russia’s actions in Ukraine, the Moscow Exchange announced on Thursday the suspension of trading in dollars and euros.
“In light of the restrictive measures imposed by the United States against the Moscow Exchange Group… effective June 13, 2024, trading on the Moscow Exchange markets will be conducted… with exceptions made for instruments with settlements in U.S. dollars and euros,” stated the exchange in a released statement.
Despite these challenges, the Moscow Exchange assured its clients of continued access to all segments of its trading platform.
Additionally, the Russian Central Bank declared the suspension of morning trading on the Moscow Exchange’s foreign exchange, precious metals, and derivatives markets from Friday until further notice.
Moreover, the U.S. sanctions targeted Russia’s National Clearing Center, which facilitates foreign exchange transactions at the Moscow Exchange.
The latest sanctions, broadening the scope of restrictions against Russia, encompass over 300 entities across Russia and various countries, including China, Turkey, and the United Arab Emirates, in efforts to curtail financial flows to Moscow amidst its ongoing conflict with Ukraine.
The sanctions, set to take full effect on August 13, come amidst a series of measures approved by Russian President Vladimir Putin to attract capital through the Moscow Exchange, offering opportunities for investments in Russian sovereign debt, corporations, and defense entities.
Although the sanctions may complicate currency transactions, their direct impact on the ruble’s exchange rate is expected to be limited, with experts projecting continued stability within the range of 90-95 rubles per USD.
Nevertheless, some anticipate increased volatility in the ruble’s exchange rate following the announcement of sanctions, potentially leading to wider spreads in currency conversion markets and reduced competition among banks.
The market response was immediate, with the Moscow Exchange index dropping by 3.5-4% at the opening of trading on Thursday, accompanied by a 15% decline in shares of the exchange itself.
