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Rouble falls on low liquid interbank market after new US sanctions
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Rouble falls on low liquid interbank market after new US sanctions
Jun 13, 2024 12:01 AM

MOSCOW, June 13 (Reuters) - The rouble fell to a near

three-week low against the dollar on the interbank market on

Thursday, albeit amid very low liquidity in pre-market trading,

after new U.S. sanctions on Russia forced the Moscow Exchange to

halt dollar and euro trading.

The unusual situation means access to reliable dollar-rouble

bid and ask prices is difficult to come by, as trading moves

exclusively to the over-the-counter (OTC) market. The central

bank will publish the official daily rate closer to 1400 GMT.

The dollar's previous close, on the eve of Wednesday's

national holiday, was 89.10 to the dollar. On the

interbank market, it reached as low as 91.4955 as some

banks took speculative positions ahead of the official launch of

bids.

New U.S. sanctions against Russia on Wednesday forced an

immediate suspension of trading in dollars and euros on its

leading financial marketplace, the Moscow Exchange.

The exchange and the central bank rushed out statements on

Wednesday within an hour of Washington announcing the new

sanctions aimed at cutting the flow of money and goods to

sustain Russia's war in Ukraine.

The central bank also suspended trading in the Hong Kong

dollar, which is pegged to the U.S. dollar, but was overall keen

to downplay the possible impact of sanctions.

"Over the past two years, the role of the US dollar and

the euro in the Russian market has been consistently declining,"

the central bank said on Thursday.

Banks, companies and investors will no longer be able to

trade either currency via the central exchange, which offers

advantages in terms of liquidity, clearing and oversight.

Instead, they will trade OTC, where deals are conducted

directly between two parties.

The central bank said dollar and euro turnover on the

OTC market had long exceeded their transaction volumes on MOEX.

"The new sanctions should not affect the rouble rate in the

medium term," said Yuri Popov, SberCIB Investment Research

strategist. "In the short term there may be high volatility and

wide spreads at exchange counters."

Major brokers have also blocked accounts in dollars, euros

and Hong Kong dollars, with deposits and withdrawals

unavailable.

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