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Moscow Stock Exchange suspended trading on Thursday trading In US dollars and Euroswhat after Russia The move follows a series of new restrictions aimed at hampering the Kremlin’s ability to launch sanctions. war In Ukraine.
“Due to the restrictive measures taken by the United States against the Moscow Exchange Group (…) from June 13, 2024, the Moscow Stock Exchange Market (…) will conduct business operations with the exception of instruments with the following characteristics: settlement in US dollars and euros,” the exchange said in a statement, as quoted by the independent media Moscow Times.
“Faced with new challenges, Moscow Exchange will continue to provide clients with access to all parts of the trading platform,” the statement added.
Late Thursday, Russia’s central bank says it will suspend early trading in foreign exchange, precious metals and derivatives markets The Moscow Stock Exchange will be closed from Friday until further notice.
Russia’s National Clearing House, which acts as an intermediary for currency transactions on the Moscow Exchange, has also been affected by U.S. sanctions.
The U.S. Treasury Department on Wednesday expanded sanctions against Russia Designed to cut off the flow of money and goods to Moscow as it continues its war on neighboring Ukraine, the sanctions target more than 300 entities, including Russian entities in countries including China, Turkey and the United Arab Emirates.
Announcing the new sanctions, the U.S. Treasury said, “Vladimir Putin has approved a series of measures to attract more capital from Russian and non-Russian persons from ‘friendly countries’ through the (Moscow Stock Exchange).”
He said this “provides Russians and non-Russians with the opportunity to benefit from the Kremlin’s war machine through investments in Russian sovereign debt, Russian businesses and key Russian defense entities.”
The new sanctions will take effect on August 13.
Russian companies and individuals can still buy and sell euros and dollars through lendersthe Russian Central Bank guarantees that all foreign currency deposits will not be affected.
While U.S. sanctions on the Moscow Stock Exchange will complicate currency trading, Experts say their impact on the ruble exchange rate is limited.
“We do not expect a significant impact on the rouble-dollar exchange rate, so our forecast for the rest of the year remains in the 90-95 rouble-dollar range,” said Sofia Donets, chief economist at T-Bank Investments.
“The new sanctions package is yet another reminder that sanctions regimes are still evolving.increasing the risk for Russians investing in alternative currencies and jurisdictions,” he added.
Other analysts believe the ruble will experience greater volatility following the U.S. announcement.the report noted.
“Sanctions will only have a secondary effect on the exchange rate, making the ruble more volatile and thus raising the ruble’s neutral exchange rate, or the equilibrium ratio between capital outflows and GDP,” wrote Alexander Isakov, Bloomberg’s chief Russia economist.
“Sanctions against the (Moscow Stock Exchange) will reduce competition in the currency exchange market, allowing banks to widen their spreads with clients,” he added.
The immediate result was that the Moscow Stock Exchange Index fell 3.5% to 4% when it opened Thursday morning, and the stock market fell 15%.
Moscow warns of ‘painful’ retaliation after G7 decides to use profits from frozen Russian assets
The Russian Foreign Ministry warned G7 faces ‘painful’ retaliation after decision to lend money to Ukraine Take advantage of frozen Russian investments.
Russian Foreign Ministry spokeswoman Maria Zakharova told a news conference in Moscow on Thursday that the deal to provide Ukraine with $50 billion in Russian assets “would not bring any benefits to the West.”
Zakharova called the agreement an “illegal move” that “could lead to a complete imbalance in the financial system and a catastrophic crisis.” Quoted from CNN.
“Russia has enough European property and funds (…) The inevitable retaliatory measures will cause great pain to Brussels,” he warned.
The spokesman also accused the West of escalating the conflict by encouraging Ukraine to attack Russian territory.
“They are demanding more from the Kiev regime. They are encouraging (Ukraine) to launch a direct attack deep into Russian territory,” he said.
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