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Following a new set of American sanctions aiming at Russian financial services, the Moscow Exchange has been compelled to halt the trading of dollars and euros on its platform.
On June 12th, the US Treasury Department’s Office of Foreign Assets Control (OFAC) introduced another wave of sanctions, this time focusing on Russian financial institutions involved in the dollar exchange market in Russia. Reacting to this, within the next hour, the Moscow Exchange issued a notice about the suspension of dollar and euro trades effective from June 13.
This move means companies, banks, and individual investors are unable to carry out dollar or euro exchanges through a centralized market and must resort to over-the-counter (OTC) methods.
As a contingency for a potential Russian rouble devaluation, many Russian citizens hold a portion of their savings in dollars or euros. The exchange reassures that these funds are safe and secure.
“Clients can still engage in the purchase and sale of U.S. dollars and euros via Russian banking institutions,” highlights the announcement. “Citizen’s and company’s U.S. dollars and euros in accounts and deposits remain safe and sound.”
Western nations have enacted severe sanctions against Moscow due to its aggressive military actions in Ukraine, aiming to limit state revenues and restrict access to vital war-related technologies.
Meanwhile, Russia is looking for ways to bypass these sanctions through third-party countries such as China, Central Asia, Turkey, and the UAE.
U.S. Deputy Treasury Secretary Wally Adeyemo recently paid a visit to Kyiv to discuss with senior Ukrainian officials on how to reinforce the sanctions imposed on Russia.
G7, EU Aiming to Curtail Banks Supporting Russia’s Sanction Circumvention, Reports Bloomberg
The allies are contemplating actions against banks that utilize SPFS, that is Russia’s answer to SWIFT, to maneuver around the trade restrictions, indicated the publication.
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Note: At TheUBJ, we curate news by transforming content from various online sources through AI-powered news feeds. We do not own or assert rights to the outlined news content. Refer to the original article at https://kyivindependent.com/us-imposes-sanctions-on-moscow-exchange/ for further details.
FAQs
Why did the Moscow Exchange suspend trading in dollars and euros?
The suspension is a direct result of new U.S. sanctions implemented against Russian financial institutions that are engaged in dollar and euro transactions on the Russian foreign exchange market.
How can Russians now trade dollars and euros?
Russians can continue to buy and sell U.S. dollars and euros through local banks, as the trading suspension only affects the Moscow Exchange.
Are the deposits of dollars and euros in Russian banks still safe?
Yes, according to the Moscow Exchange’s statement, all funds in U.S. dollars and euros in the accounts and deposits of citizens and companies are secure.
What are the broader implications of such sanctions?
The sanctions aim to impact Russia’s state revenue and constrain its ability to secure essential technologies for its military efforts in Ukraine. Additionally, it pushes trading to less regulated OTC markets.
Is Russia looking for workaround solutions to these sanctions?
Yes, Russia has been exploring sanction evasion tactics through third-party intermediary countries like China, Central Asia, Turkey, and the United Arab Emirates.
