The Central Bank announced its readiness to untie the rate of "unfriendly" currency from the stock exchange

The Central Bank announced its readiness to untie the rate of "unfriendly" currency from the stock exchange

The Central Bank announced its readiness to untie the rate of "unfriendly" currency from the stock exchange

3 October, 15:16
The Central Bank has developed "safety" procedures for establishing official exchange rates that are not related to the Moscow Exchange. The draft document was published on the official website of the regulator on October 3. Banking analysts warn that in this case, we should expect an increase in volatility.

Ekaterina Maksimova

In the new document (full text - here ) the regulator describes an alternative mechanism for setting the exchange rate.

"In order to establish official rates, additional alternative data sources will be provided - bank statements and digital platforms for over-the-counter trading," the Central Bank said in a document.

Banking analysts unanimously note that the traditional procedure for determining the official foreign exchange rate required clarification due to the threat of a new package of sanctions against Russia.

Earlier, the American edition of The Wall Street Journal reported that the Deposit Insurance Agency, the MIR payment system, the National Settlement Depository and, most importantly, the National Clearing Center (NCC) would fall under the new restrictions. Blocking the NCC means that exchange trading in dollars and euros will be completely stopped. The only mechanism for the formation of any objective exchange rate will be the interbank rate.

As Vasily Karpunin , an expert at BCS World Investments, explains, the Central Bank is trying to reduce risks in the event of a potential halt in free exchange trading.

Accordingly, new metrics will be needed to determine the course. If now it is based on exchange transactions, then if they are absent in the future, the Central Bank will first rely on bank transactions (with clients and other banks), and in their absence, on over-the-counter transactions. In the meantime, trading on the Moscow Exchange is taking place, nothing changes in terms of determining the official rates," Karpunin believes.

Analysts at Rosbank note that the new mechanism, which was announced today by the Central Bank of the Russian Federation, does not explain two points: a potential change in the structure of the market and its impact on the equilibrium rate in the event of a reduction in bidders. And what is the plan in case Russian financial institutions lose access not only to the exchange infrastructure, but also to correspondent accounts in "unfriendly" foreign currencies.

"In the first case, we should expect an increase in the volatility of the intraday rate (and officially set by the Bank of Russia between days). <...> In the second case, financial processes will inevitably be accompanied by damage to foreign trade, making payments in "unfriendly" currencies de facto impossible" , - Rosbank analysts say.

Exchange rates are calculated daily based on the volume of transactions concluded on the Moscow Exchange from 10:00 to 15:30. If the regulator does not have such data, then the exchange rate will be set on the basis of transactions of banks, which, in turn, submit reports to the Central Bank of the Russian Federation. In the event that there is no data from either the Moscow Exchange or banks, the regulator will take into account data on transactions concluded on digital OTC trading platforms.

Meanwhile, according to BCS Investments, in the foreign exchange market, due to fear of sanctions , there is an active flow of funds from the currencies of unfriendly countries to the currencies of friendly states. The dollar at the end of last week collapsed to 53.2 rubles, the euro for the first time since October 2014 fell to the level of 50.7 rubles.

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