The National Clearing Center (NCC), a subsidiary of the Moscow Exchange, is Russia's main currency depository. The little-known company has become the main conduit of foreign currency to Russia and has not yet come under US and EU sanctions. Bloomberg reports about the new quality of the NCC, citing sources close to the structures of the Moscow Exchange and the Russian authorities.
The agency claims that the NCC has become a key intermediary between Russia and other countries. All currency payments for gas, oil and other resources still go through the NCC, which makes the structure of the Moscow Exchange a channel for billions of dollars and euros. Moreover, the NCC has become an alternative to many banks that fell under Western sanctions and lost the ability to make international payments.
The freezing of foreign exchange reserves forced banks, companies and even individuals to play it safe, so now the NCC's currency base is not dollars and euros, but the Chinese yuan and other currencies of "friendly" countries. Sources say that foreign exchange earnings in dollars, euros and other "dangerous" currencies are quickly converted into yuan or other currencies that do not risk falling under sanctions. A similar trend is observed in small banks, which still retained the ability to use the SWIFT system and were not subject to sanctions.
“The NCC does not have its own money, it serves the transactions of banks and their clients, because it can still conduct transactions in dollars. After the information about the sanctions against the NCC passed, most of the currency positions were converted into yuan,” Oleg Vyugin, former chairman of the Supervisory Board of the Moscow Exchange, who left his post in the summer of 2022, told the agency.
The publication claims that the failure to isolate Russia from foreign exchange upset some American and European politicians, as some of the sanctions pursued this very goal. It is impossible to estimate the total flow of currency passing through the NCC, the agency notes, however, data on Russia's foreign exchange reserves give an indirect estimate – the Russian authorities were able to attract about $100 billion thanks to oil and gas revenues, thus increasing foreign exchange reserves, according to Bloomberg.
The agency believes that this money came to the accounts of the Central Bank through the NCC, that is, the "daughter" of the Moscow Exchange helps to bypass Western sanctions. The last two quarters were particularly successful for Russia, when energy prices were close to local highs, and the trade balance was positive and broke records.
In the summer, the Central Bank got scared for the prospects of the NCC and began to warn brokers, banks and financial organizations about the risks of making payments in foreign currency and even storing foreign currency in accounts. Moreover, the regulator was preparing for sanctions against the NCC, which could stop foreign exchange trading on the Moscow Exchange and negatively affect the entire financial system. Against the same background, banks and financial organizations began to "squeeze out" the currency – to create unacceptable conditions for storing foreign currency for many customers. The Central Bank then even thought about its analogue of exchange trading, which would allow reflecting the market rate of the ruble. However, sanctions against the NCC have not yet been introduced.