Russia, hit by new US sanctions, halts dollar and euro trade on biggest exchange

Reuters

Russia, hit by new US sanctions, halts dollar and euro trade on biggest exchange

जून 12, 2024 at 3:48 अपराह्न UTC

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 3-Russia, hit by new US sanctions, halts dollar and euro trade on main bourse</title></head><body>

Sanctions end dollar and euro trade on biggest bourse

US says it's targeting financing of war economy

Some banks immediately jack up price of buying dollars

Adds exporter, trading volumes in paragraphs 8-10, banks hiking dollar rates in 12-15, detail in 20-25

By Alexander Marrow and Mark Trevelyan

June 12 (Reuters) -New U.S. sanctions against Russia have forced an immediate suspension of trading in dollars and euros on its leading financial marketplace, the Moscow Exchange MOEX.MM.

The exchange and the central bank rushed out statements on Wednesday - a public holiday in Russia - within an hour of Washington announcing a new round of sanctions aimed at cutting the flow of money and goods to sustain 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.

The move means banks, companies and investors will no longer be able to trade either currency via a central exchange, which offers advantages in terms of liquidity, clearing and oversight.

Instead, they will have to trade over-the-counter (OTC), where deals are conducted directly between two parties. The central bank said it would use OTC data to set official exchange rates.

Many Russians hold part of their savings in dollars or euros, mindful of periodic crises in recent decades when the rouble has crashed in value. The central bank reassured people that these deposits were secure.

"Companies and individuals can continue to buy and sell U.S. dollars and euros through Russian banks. All funds in U.S. dollars and euros in the accounts and deposits of citizens and companies remain safe," it said.

One person at a large, non-sanctioned Russian commodities exporter told Reuters: "We don't care, we have yuan. Getting dollars and euros in Russia is practically impossible."

With Moscow pursuing closer trade and political ties with Beijing, China's yuan has ousted the dollar to become MOEX's most traded currency, accounting for 53.6% of all foreign currency traded in May.

Dollar-rouble trading volume on MOEX tends to be around 1 billion roubles ($11 million) a day, according to LSEG data, while euro-rouble trading hovers at around 300 million roubles daily. For yuan-rouble trading, daily volumes now regularly top 8 billion roubles.

WIDE SPREADS

On the eve of the national holiday, the rouble closed at 89.10 to the dollar RUBUTSTN=MCX and at 95.62 against the euro EURRUBTN=MCX.

But following the sanctions news, some banks immediately jacked up their dollar rates.

Norvik Bank said it was offering to buy dollars for just 50 roubles but sell for 200 roubles, though it later adjusted the rates to 88.20/97.80. Tsifra Bank was buying dollars at 89 roubles and selling at 120.

Other major banks were quoting narrower spreads of 6-7 roubles between their buy and sell rates.

The U.S. Treasury said it was "targeting the architecture of Russia’s financial system, which has been reoriented to facilitate investment into its defence industry and acquisition of goods needed to further its aggression against Ukraine".

Russia's central bank has been bracing for such sanctions for around two years. In July 2022, the bank said it was modelling various sanctions scenarios with forex market participants and infrastructure organisations.

"This is bad, but expected news," Russian broker T-Investments said on Telegram.

Forbes Russia had reported in 2022 that the central bank was discussing a mechanism for managing the rouble-dollar exchange rate should exchange trading be halted in the event of sanctions against MOEX and its National Clearing Centre, which was also hit by the new sanctions.

NERVY TRADING AHEAD

MOEX said share trading and money market trades settled in dollars and euros would also cease.

The sanctions will hit the exchange's profits by slashing trading volumes. In May, total volume on MOEX was 126.7 trillion roubles ($1.43 trillion), up more than a third on the same month of the previous year.

In 2023, MOEX recorded net profit of 60.8 billion roubles, a year-on-year increase of 67.5%.

Yevegeny Kogan, an investment banker and professor at Russia's Higher School of Economics, urged people against panicking.

"You know, it’s genetic for us - if we’re scared, we run to buy currency. And it doesn’t matter whether it’s 100, 120 or 150. You mustn't rush," he warned people on Telegram, saying things could get very serious if people ignored that advice.

"Friends, it looks like tomorrow will be a very nervy day."

($1 = 88.9955 roubles)

Reporting by Alexander Marrow;
Writing by Mark Trevelyan
Editing by Tomasz Janowski and Mark Potter

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अस्वीकरण: XM Group के सत्व केवल निष्पादन वाली सेवा और हमारी ऑनलाइन व्यापार सुविधा में पहुँच प्रदान करते हैं, ताकि व्यक्ति वेबसाइट पर या उसके जरिए उपलब्ध सामग्री को देख सके और/या उसका उपयोग कर सके। इसका प्रयोजन इसे बदलना या विस्तार देना नहीं है, न ही वह इसे बदलता या विस्तार देता है। इस तरह की पहुँच हमेशा ही निम्नलिखित के अधीन रहेगी: (1) नियम और शर्तें; (2) जोखिम चेतावनियाँ; और (3) पूर्ण अस्वीकरण। इसलिए ऐसी जानकारी सामान्य सूचना से अधिक कुछ भी नहीं है। विशेष रूप से, कृपया इससे अवगत रहें कि हमारी ऑनलाइन व्यापार सुविधा की सामग्रियाँ न तो किसी चीज का अनुरोध करती हैं, न ही वित्तीय बाजारों में प्रवेश करने की पेशकश ही करती हैं। किसी भी वित्तीय बाजार में व्यापार करने के साथ आपकी पूँजी को उल्लेखनीय जोखिम है।

हमारी ऑनलाइन व्यापार सुविधा में प्रकाशित सभी सामग्रियाँ शैक्षणिक/सूचनात्मक प्रयोजनों मात्र के लिए हैं, और इनमें वित्तीय, निवेश टैक्स या व्यापार सलाह और सुझाव नहीं हैं - न ही ऐसा समझना चाहिए कि इनमें ये सब हैं; न ही इनमें हमारी व्यापार कीमतों का अभिलेख है; न ही इनमें किसी वित्तीय उपकरण में लेन-देन करने का निमंत्रण या अनुरोध है; न ही ये आपको अवांछित वित्तयी प्रोमोशन पेश करती हैं।

इस वेबसाइट में मौजूद कोई भी तृतीय पक्षीय सामग्री, तथा XM द्वारा तैयार की गई सामग्रियाँ, जैसे: अभिप्राय, समाचार, अनुसंधान, विश्लेषण, कीमतें और अन्य सूचनाएँ या तृतीय पक्षों की साइटों के लिंक, "जैसा-है-वैसा" के आधार पर बाजार के बारे में सामान्य टिप्पणी के रूप में उपलब्ध कराई गई हैं, और वे निवेश हेतु सलाह नहीं हैं। जिस हद तक कीसी सामग्री को निवेश अनुसंधान मान लिया जाता है, उस हद तक आपको ध्यान में रखना होगा और इसे स्वीकार करना होगा कि वह सामग्री इस उद्देश्य से और निवेश अनुसंधान की स्वतंत्रता को बढ़ावा देने के लिए कानूनी आवश्यकताओं के मुताबिक, तैयार नहीं की गई है, और इसलिए उसे प्रासंगिक कानूनों और विनियमों के तहत विपणन संप्रेषण माना जाएगा। कृपया सुनिश्चित करें कि आपने गैर-आश्रित निवेश के बारे में हमारी सूचना को पढ़ और समझ लिया है। पीछे दी गई जानकारी के बारे में अनुसंधान और जोखिम चेतावनी यहाँ उपलब्ध है।

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