Moscow Stock Exchange suspends dollar transactions

The Central Bank of Russia suspended trading and settlement of financial instruments denominated in US dollars and euros on the Moscow Stock Exchange.

As indicated in a press release, the measure responds to the sanctions imposed by the United States against the Moscow Exchange Group (MOEX).

According to the MOEX, the measure becomes effective from June 13, 2024 and, since then, in the foreign exchange market and in the precious metals market, all instruments, except currency pairs with the US dollar and the eurowill be negotiated.

Meanwhile, in the stock and monetary markets, trading will be carried out in all instruments. Exceptions are instruments with settlements in US dollars and euros.

“The main task of the Moscow Stock Exchange is to ensure the functioning of the financial market infrastructure and the reliability of the transactions of its participants. In the face of new challenges, the Moscow Stock Exchange will continue to provide clients with access to all segments of the trading platform,” they say from the entity.

The Central Bank of Russia clarified that despite this suspension, activity in the rest of the foreign exchange market segments, as well as the negotiation of financial instruments denominated in rubles and other currencies, It will not be affected and will continue to develop normally.

For example, transactions with US dollars and euros will continue to be possible in the over-the-counter (OTC) market. While Russian companies and citizens They will be able to continue buying and selling dollars and euros through local banks.

This indicates that funds in dollars and euros in the accounts and deposits of individuals and companies They remain safe and will not be affected by these measures.

The decision of the Central Bank of Russia is known on the same day that the United States announced a new series of economic sanctions against more than 300 entities, among them, the Moscow Stock Exchange. This, with the aim of stopping the war in Ukraine and putting pressure on financial institutions that maintain relations with Russia.

As expressed by Janet Yellen, the secretary of the US Department of the Treasury, these sanctions “affect the avenues (Russia) has left to obtain international materials and equipment, including its dependence on essential supplies from third countries.”

Now, the Moscow Stock Exchange’s decision to avoid the greenback, it is read as a de-dollarization practice. Something in which the Eurasian country has already made progress, which has publicly claimed its intention to stop using the US currency.

Additionally, Russia is holding talks on the de-dollarization of its commercial relations with Cuba, Nicaragua, Venezuelaas well as with the members of the BRICS group, as recently reported by the director for Latin America of the Russian Foreign Ministry, Alexandr Schetinin.

Russia’s measure, which is part of dollarization, also recalls the trend that international trade is experiencing with large players determined to leave aside the US currency and begin to give greater weights to their local currencies. This is how in Latin America and Asia, there are entire nations determined to ignore the dollar and the hegemony it has for the world economy.