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Sanctions end dollar and euro trade on biggest bourse

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US says it's targeting financing of war economy

(Adds broker reaction, context)

By Alexander Marrow and Mark Trevelyan

June 12 (Reuters) - New U.S. sanctions against Russia

have 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 - a public holiday in Russia - within an hour of

Washington announcing a new round of sanctions aimed at cutting

the flow of money and goods to sustain Russia's war in Ukraine.

"Due to the introduction of restrictive measures by the

United States against the Moscow Exchange Group, exchange

trading and settlements of deliverable instruments in U.S.

dollars and euros are suspended," the central bank said.

It added that it would use data from over-the-counter

trading - where deals are conducted directly between two parties

instead of via a central exchange - to set official exchange

rates for the dollar and euro.

The central bank reassured people that their dollar and euro

bank deposits were secure.

"Companies and individuals can continue to buy and sell U.S.

dollars and euros through Russian banks. All funds in U.S.

dollars and euros in the accounts and deposits of citizens and

companies remain safe," it said.

The Moscow Exchange (MOEX) said share trading and money

market trades settled in dollars and euros would cease. Russia's

National Clearing Centre (NCC), MOEX's clearing agent, was also

sanctioned.

The U.S. Treasury said it was "targeting the architecture of

Russia's financial system, which has been reoriented to

facilitate investment into its defence industry and acquisition

of goods needed to further its aggression against Ukraine".

Russia's central bank has been bracing for such sanctions

for around two years. In July 2022, the bank said it was

modelling various sanctions scenarios with forex market

participants and infrastructure organisations.

Forbes Russia had reported that the bank was discussing a

mechanism for managing the rouble-dollar exchange rate should

exchange trading be halted in the event of sanctions against the

MOEX and the NCC.

The immediate impact of the U.S. move was not clear, with

Russian financial markets closed for the Russia Day holiday.

"This is bad, but expected news," Russian broker

T-Investments said on Telegram.

The rouble closed at 89.10 to the dollar on

Tuesday and at 95.62 against the euro.

Russia's second-largest bourse, SPB Exchange, came

under U.S. sanctions in late 2023. Those sanctions forced the

exchange, which specialises in trading foreign shares, to halt

trading temporarily and switch to settlements in roubles.