Moscow Exchange Stops Trading In US Dollars, Euros After US Imposes Sanctions

The Moscow Exchange (MOEX), Russia’s largest financial market, suspended trading in U.S. dollars and euros on Wednesday after Washington announced sanctions intended to stop the flow of money and goods to support Russia’s war in Ukraine.

“Due to the introduction of restrictive measures by the United States against the Moscow Exchange Group, exchange trading and settlements of deliverable instruments in U.S. dollars and euros are suspended,” the central bank said, Reuters reported.

As a result, banks, companies and investors will have to trade directly over-the-counter instead of through a central exchange, which presents perks in terms of liquidity, clearing and oversight.

The central bank said Russian companies and individuals can continue to buy and sell U.S. dollars and euros through Russian banks. It also reassured them that their deposits in these currencies were safe.

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Dollar-rouble trading volume on MOEX is usually around 1 billion roubles ($11 million) a day, according to LSEG data, while euro-rouble trading stays around 300 million roubles daily.

Daily volume for yuan-rouble trading regularly amount to a distant 8 billion roubles per day, according to Reuters.

The rouble closed at 89.10 to the dollar and at 95.62 against the euro on the eve of the national holiday, but some banks immediately hiked their dollar rates in response to the newest U.S. sanctions.

For example, Norvik Bank said it was offering to buy dollars for just 50 roubles but sell for 200 roubles, though it later narrowed the rate spread to 88.20 and 97.80. Tsifra Bank was buying dollars at 89 roubles and selling at 120.

Russia’s central bank was for such sanctions for around two years by modeling various sanctions scenarios with forex market participants and infrastructure organizations.

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