WSJ: new US sanctions may stop dollar exchange trading in Russia

The United States is preparing to tighten sanctions against Russia for conducting mobilization, as well as illegal voting on the annexation of the occupied Ukrainian territories to Russia. This was reported by The Wall Street Journal, citing sources familiar with the discussions. The publication also claims that the European Union is preparing to join some restrictions.

The new package of US sanctions will include the Mir payment system, the US establishment fears that it could be used abroad to circumvent financial restrictions. US pressure has already forced Turkey, Armenia, Vietnam and other countries to refuse to cooperate with the payment system, which has made Mir virtually closed within Russia.

In addition to the payment system, the Deposit Insurance Agency (DIA), the National Settlement Depository (NSD) and the National Clearing Center (NCC) may be subject to restrictions. The last two organizations are directly related to the provision and conduct of exchange trading in Russia, the imposition of sanctions against these institutions may undermine the stability of the Russian trading floors, primarily the Moscow Exchange.

Also, some Russian banks, which may be disconnected from the SWIFT international payment system, and new state-owned companies may also fall under the new restrictions. The possibility of strict control of exports and imports to Russia is being considered, which should undermine the economic and military potential of the country. Sources of the publication note that a final decision has not yet been made, and the US intends to coordinate its position with the EU.

The Russian stock market is seriously afraid of sanctions against NSD and NCC. Sanctions against NSD threaten to completely freeze American securities in the portfolios of Russian investors, a similar scenario happened with European securities back in the spring. Sanctions against the NCC may disrupt the working architecture of exchange trading in the US dollar, as previously warned by the Bank of Russia. To reduce the risks of investors and major market players, the Central Bank has repeatedly called for the reduction of assets denominated in foreign currency.

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