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.
US Targets Russia's Key Financial Operations
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 suspension, the central bank has reportedly urged companies and individuals to continue buying and selling US dollars and euros through Russian banks.
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 impacts from the sanctions 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. Trading volumes on the exchange's markets jumped 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.
