Russia’s main exchange said it is halting trading in US dollars and the euro after President Joe Biden’s administration unveiled a raft of measures designed to further isolate Moscow from the international financial system over its war in Ukraine.
The Moscow Exchange from Thursday halted trading on the foreign exchange, precious metals, stock, money and the standardised over-the-counter derivatives markets in instruments with settlement in US dollars and the European single currency, reports The Business Times.
The company, known as Moex, was targeted along with the country’s main settlement depository, by US restrictions announced late on Wednesday.
The MOEX Russia Index opened down as much as 4 per cent in Moscow on Thursday.
The move has sown confusion among markets over the fallout from the sanctions. The changes are likely to lead to increased costs for market participants due to higher commissions and wider bid-ask spreads as well as unfavourable exchange rate fluctuations.
Any settlement with a foreign counterpart and foreign trade operations may be negatively affected, and the restrictions could also have an impact on yuan trading, which now accounts for more than half of foreign currency exchange.
Russia’s authorities have sought to move away from the US dollar and euro, branding them “toxic” amid sanctions over President Vladimir Putin’s February 2022 invasion of 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 have imposed restrictions.
