US sanctions force Russia to stop dollar and euro transactions, ruble exchange rate fluctuates

New U.S. sanctions have Formal trading platform for US crude oil and goldforced Russia's main exchanges to suspend trading in dollars and euros, leading to a shift towards the over-the-counter (OTC) market. This has caused price and spread fluctuations, obscuring access to reliable ruble pricing.

The Russian Central Bank set the official ruble-to-dollar exchange rate on Friday at 88.21, an appreciation of about 0.9% from the previous day's close. However, the sanctions make it difficult to determine the ruble's accurate value.

In the interbank market, the ruble's trading range moved from a 10-day low of 90.25 to a near one-year high of 86.28, finally closing at 88.62, an increase of 0.4%.

The Central Bank calculates its official exchange rate based on OTC transactions rather than primarily relying on data from the Moscow Exchange (MOEX) as before.

Since Russia's full-scale invasion of Ukraine in February 2022, U.S. sanctions against MOEX and its settlement agent, the National Settlement Depository (NSD), had been anticipated, but the move still surprised the market.

The sanctions have led MOEX to suspend trading in dollars, euros, and Hong Kong dollars. The U.S. stated that the move aims to cut off the flow of funds and resources supporting Russia's war in Ukraine.

MOEX is one of Russia's key financial infrastructures, but the latest sanctions are believed to have little impact on Russia's ability to continue international sales of oil and gas, as Moscow has largely redirected its trade to China and other Asian countries.

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