07:44, 13 June 2024Source:
The Central Bank of Russia, after the introduction of US sanctions against the Moscow Exchange, announced the suspension of trading in the Hong Kong dollar from June 13.
The decision was made “to reduce risks,” the bank explained . The suspension of trading in the Hong Kong dollar by the Central Bank was explained by the extension of settlements – this currency is pegged to the US dollar, and banks that conduct settlements in it traditionally apply fairly strict compliance, RBC writes with reference to the statement.
The Central Bank also moved by three hours the start of the trading session on the foreign exchange market and the precious metals market, as well as on the Moscow Exchange derivatives market with settlements in currencies other than the US dollar, euro and Hong Kong dollar. On June 13, trading will begin not at 6:50 a.m., but at 9:50 a.m.
Regarding the ruble exchange rate, the Central Bank stated that it will remain uniform and market-based – only the range of data for its calculation will change. The Central Bank indicates that exchange trading in currency is not a necessary condition for the convertibility of the ruble and the free circulation of foreign currency.
The main currency for exchange trading is now not the dollar, but the yuan – its share in Moscow Exchange trading in May was 54%, the regulator explains. “The yuan/ruble exchange rate will set the trajectory for other currency pairs and will become a reference point for market participants,” the Central Bank added .
The day before, the US Treasury announced the introduction of sanctions against more than 300 individuals and legal entities – both from Russia and from other countries helping Russia to circumvent previously introduced restrictions. The sanctions included the Moscow Exchange, the National Clearing Center and the National Settlement Depository. Analysts then pointed out that this threatened isolation from the dollar system, including stopping dollar trading.
After the introduction of sanctions, the Moscow Exchange announced the suspension of trading in US dollars and euros from June 13. The Central Bank reported that transactions with the dollar and euro will continue to be made on the over-the-counter market.
(c)MEDUZA 2024
I’m not especially knowledgeable about international finances, but this looks to me as closing a loophole used by Russians corporations and individuals, who tried to protect their savings against inflation by converting them into HK dollars. That outflow of money did put the ruble under additional devaluation pressure, of course. 🤔
The russians can protect their savings now by converting them into Yuan. 😂