The Bank of Russia is preparing to ban exchange trading in the dollar and euro: the regulator is working on a scenario in which the National Clearing Center (NCC) and the Moscow Exchange, the main organizers of foreign exchange trading on the Russian market, may fall under Western sanctions. Representatives of the Central Bank have already met with brokers and large banks and even prepared a rough plan in case of sanctions. This is reported by Forbes, citing sources who participated in discussions with the regulator.
“This is a tough option, in which all client funds in the NCC will be frozen and trading in the dollar and euro on the Moscow Exchange will be stopped,” one of the participants of the meeting explains the possible consequences.
The publication claims that the meeting took place about two months ago, from the Central Bank there was the first deputy chairman of the regulator, Ksenia Yudaeva. The Bank of Russia warned financial institutions about the need to reduce foreign exchange positions, as they pass through the NCC, and in case of sanctions they will be frozen. The NCC does not have much of its own currency, but the client’s ones are $30-50 billion. The Central Bank itself confirmed the fact of the meeting and working out scenarios in case of sanctions, but did not disclose details.
The key problem of the sanctions is not so much the possible blocking of funds, but the loss of the instrument for determining the exchange rate of foreign currencies. Without the NCC, the Moscow Exchange will not be able to conduct trading, which means that the Bank of Russia will lose its main landmark since 2014. At the same time, the Central Bank itself does not want to deal with the determination of rates and therefore is working on the launch of a market alternative. Sources of the publication talk about the creation of the so-called "Russian Bloomberg" – an interbank aggregator of exchange rates, on the basis of which an analogue of the exchange will be formed.
“The exchange rate of the dollar will no longer exist, but exports and imports will remain, so you need to understand at what rate to exchange rubles. The Central Bank does not want to take on the function of determining the course, ”a source told Forbes.
According to the new rules, the rate will be determined by a mechanism based on the quotes of the 10 largest banks; neither sources nor representatives of the Central Bank give details of the “mechanism”. Forbes claims that some banks have already seen the draft of the mechanism, but the publication could not find the document. If sanctions are imposed, trading in the currencies of "unfriendly countries" on the Moscow Exchange will simply stop, and the currency sector will be filled with the currencies of "friendly countries". At the same time, Sergey Suverov from Arikapital believes that the creation of the “Russian Bloomberg” may not achieve its goal, since the formation of the rate will simply go to the over-the-counter trading market.
Since the beginning of the summer, the Bank of Russia has been systematically hinting and working to reduce foreign exchange positions in the Russian financial system. At first, the regulator put pressure on banks to crowd out the currency in the structure of their liabilities, forcing clients to withdraw the currency from banks. Later similar measures affected brokers. Financial institutions have begun to introduce fees for storing currency in order to reduce the risks on foreign exchange positions, as well as to worsen the conditions for foreign exchange products.