Reported 7 months ago
Following new US sanctions on Russia, the Moscow Stock Exchange announced the suspension of trading and settlement in US dollars and Euros. Starting today, the exchange cannot conduct forex, stock, or futures trades settling in USD or Euro; Russian business figures noted that acquiring USD or Euro in Russia is now nearly impossible, with more trades being done in RMB. The Central Bank of Russia assured that over-the-counter markets can still trade USD and Euro, while the official exchange rate for RUB against the two currencies will be determined based on bank and OTC data. Amidst these developments, a major Russian bulk commodity export company unaffected by Western sanctions remarked they are indifferent as they now use RMB. With deepening economic ties between Russia and China, RMB has overtaken USD as the largest traded currency on the Moscow Stock Exchange, comprising 53.6% of total forex transactions in May. President Biden's December executive order imposing sanctions on entities assisting Russia in obtaining war funds now encompasses approximately 4500 entities. These sanctions have also aimed to prevent Russia from acquiring technology, such as a Hong Kong front company supplying chips to Russia. Since Russia's February 2022 invasion of Ukraine, the country has faced a series of sanctions, but IMF predicts Russia's economy will still grow by 3.2% this year. Analysts believe these sanctions will eventually weaken Russia's economy, and the US Treasury Secretary Yellen stated the new sanctions targeted the remaining channels for Russia to access equipment, including reliance on third-country supply chains. This wave of sanctions comes ahead of the G7 summit scheduled from the 13th to the 15th in southern Italy.
Source: YAHOO