Moscow Exchange Halts Dollar, Euro Trading on New US Sanctions

Russia’s main exchange said it’s halting trading in US dollars and the euro after President Joe Biden’s administration unveiled a raft of measures designed to further impede the Kremlin’s war in Ukraine.

Bloomberg
First Published12 Jun 2024, 11:03 PM IST
Moscow Exchange Halts Dollar, Euro Trading on New US Sanctions
Moscow Exchange Halts Dollar, Euro Trading on New US Sanctions

(Bloomberg) -- Russia’s main exchange said it’s halting trading in US dollars and the euro after President Joe Biden’s administration unveiled a raft of measures designed to further impede the Kremlin’s war in Ukraine.

From June 13, the Moscow Exchange won’t carry out trading on foreign currency, precious metals, stock, money and futures markets in instruments with settlement in dollars and the European single currency. The company, known as Moex, was targeted along with the country’s main settlement depository, by US restrictions announced Wednesday.

Russia’s authorities have sought to move away from the dollar and euro, branding them “toxic” amid sanctions over President Vladimir Putin’s campaign against Ukraine. The share of the yuan in trading has increased, while officials have pursued measures to discourage businesses and people from using the currencies of nations that imposed restrictions. 

Transactions with the dollar and euro will still be available on the over-the-counter market, the central bank said in a statement. The monetary authority said it will use bank and OTC data to set the ruble’s exchange rates to those currencies. 

What Bloomberg Economics Says...

“Escalation of sanctions will destabilize the currency market and shift flows towards private non-sanctioned banks. The next step of escalation can be secondary sanctions on foreign banks that help with settlements.”

Alexander Isakov, Russia economist. 

Daily trading in the US dollar started in Russia more than three decades ago. The share of so-called toxic currencies, which include the greenback and euro, fell to 45.9% in exchange-based foreign currency trading in May, while yuan share rose to 53.6%, according to the Russian central bank’s data. 

“Companies and individuals can continue to buy and sell the US dollar and euro through Russian banks,” the central bank said, adding that all their funds in those currencies in accounts and deposits “will remain safe.” 

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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First Published:12 Jun 2024, 11:03 PM IST
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