The Moscow Exchange (MOEX), Russia’s foremost marketplace, has abruptly ceased trading in USD and EUR after the US instituted new sanctions against the country.
Russia’s Top Exchange Cancels Trade Of USD And EUR After Fresh Sanctions
CNN reported that the Russian Central Bank (RCB) and the MOEX published statements to this effect on Wednesday 12 June 2024, a bank holiday in Russia. These were released a mere hour after Washington announced the fresh sanctions.
Based on CNN’s report, these penalties aim to hinder the “flow of money and goods” into Russia as they sustain the war effort against Ukraine. The central bank’s statement indicated:
Due to the introduction of restrictive measures by the United States against the Moscow Exchange Group, exchange trading and settlements of deliverable instruments in US dollars and euros are suspended.
This means that financial institutions, businesses and individual investors cannot facilitate trades in either of these currencies and will not be able to tap into benefits such as improved liquidity. USD and EUR transactions will now be direct over-the-counter (OTC) trades. The RCB will reportedly use data from OTC transactions to establish exchange rates for these currencies.
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CNN pointed out that many Russian citizens “hold savings in dollars or euros” because of the rouble’s dismal value compared to other forex. The central bank assured these Russians their investments were safe. It stated:
Companies and individuals can continue to buy and sell US dollars and euros through Russian banks. All funds in US dollars and euros in the accounts and deposits of citizens and companies remain safe.
This move does not seem to faze traders, who fall back on the Chinese yuan, which reportedly overtook the USD on MOEX’s currency trade.
