The Moscow Exchange (MOEX) announced it would cease trading in the dollar and euro after the US Treasury placed it on the sanctions list on Wednesday. It will be possible to sell currency in Russian banks as before, assures the Russian Central Bank. The sanctions also included the National Clearing Center (NCC) and the National Settlement Depository (NSD), which act as intermediaries when trading dollars on the Russian foreign exchange market. As follows from the exchange message, starting from June 13, “on the foreign exchange market and the precious metals market, trading is carried out in all instruments, with the exception of currency pairs with the US dollar and euro.” Similar restrictions will apply to the stock and money markets, where settlements of derivative instruments settled in US dollars and euros are suspended. The Moscow Exchange is an important part of the Russian financial infrastructure. On it, banks, businesses and investors buy and sell currencies – dollars, euros and yuan. The Russian Central Bank, depending on the progress of trading in the first half of the day, set the ruble exchange rate. This rate then determined the rate at which the currency could be purchased from banks. The new sanctions actually broke this system. The Central Bank of the Russian Federation will now calculate the exchange rate based on reporting data and over-the-counter funds – exchange rate formation will become opaque. “The main consequence will be a structural increase in the volatility of the ruble exchange rate,” Alexander Isakov, chief economist at Bloomberg Economics for Russia and Central and Eastern Europe, said in an interview with the BBC. Volatility means that the ruble will fluctuate much more. After the start of the war in Ukraine, many foreign investors left the Russian market, there was less money on it, and because of this, the fluctuations of the ruble became much stronger. For example, in 2023 there was a protracted fall in the ruble, which the authorities stopped literally manually. Now, apparently, the ruble will become even less stable. Financier Sergei Romanchuk writes about the growth of spreads. This means that the difference between the rate of sale and purchase of currency will be higher – banks can make good money on this. He also expects currency trading volume to contract further. “What will happen to yuan trading in the future is not clear,” writes Romanchuk. He suggests that the Chinese authorities may not want to service the Russian National Clearing Depository. Previously, media reported that Chinese banks double-check transfers from Russia to avoid secondary sanctions. “This is the classic “this has never happened before – and here we go again”: we have become quite relaxed regarding significant sanctions, not formal, but truly significant ones, in the last six months or so. So they arrived, I would even say, a little unexpectedly: it is impossible to say that we were all preparing for June 12 and monitoring, so it’s still such a surprise. For the market, when there is a surprise, this is always a reason for greater volatility,” says Sofya Donets, chief economist at T-Investments. During trading on the stock exchange, the ruble exchange rate almost did not react to the news about the sanctions – it only weakened slightly to 89.2 rubles per dollar. In banking applications, the difference between buying and selling is significant, but the rate has not increased that much yet. At Sberbank on Wednesday evening a dollar could be bought for 90.4 rubles and sold for 87.2 rubles. At T-Bank (formerly Tinkoff), dollars can be purchased at the rate of 93.75 rubles. “For the market as a whole, these sanctions are not a very big event; for an ordinary Russian, they are just a very small event. But for the Moscow Exchange itself, this is a significant event,” Donets believes. The Central Bank assured that nothing will change for the population: it is still possible to buy and sell currency, and funds in bank accounts will also be preserved. Banks also stated that nothing would change, for example, Sber reported this. Financial companies also claim that this will not affect their work; for example, similar statements were made by Alfa Investments. Apparently, the main consequence is that the Russian financial system is deprived of a convenient and safe currency exchange instrument. And this already has wider consequences for the economy, which has become increasingly simpler since the start of the war. But so far the consequences of this are difficult to notice. Alexander Isakov believes that a currency shortage is unlikely to be expected. “Most likely, the main effect will not be a shortage of foreign currency, but that transaction costs will increase for exporters and importers—the cost of currency exchange, transfers, and so on,” he believes. In the long term, this will lead, according to him, to capital outflow and, again, a weaker ruble. That is, companies and investors will be able to buy and sell currency, just not within the framework of the Moscow Exchange, which was a convenient and safe tool for such operations. Romanchuk calls the cessation of trading on the Moscow Exchange in dollars and euros “back to the 90s.” "Once upon a time there was no electronic currency trading with centralized clearing, and nothing! There were people alive!" – he writes. He believes that “an alternative electronic platform will emerge, but it will not be possible to quickly repeat the success of the Moscow Exchange.” Moscow Exchange, NCC and NSD are only part of a large sanctions list announced by the US Treasury on Wednesday. It includes more than 30 individuals and two hundred companies of various profiles; this is one of the largest additions to the American sanctions register in recent years. The sanctions included, in particular, Gazprom Invest, the Arctic LNG 1, Arctic LNG 3 and Murmansk LNG projects, RusGazDobycha, the Ob Gas Chemical Complex, the Belokamenka oil terminal, the Sogaz insurance company, Goznak and ship repair plant of the Black Sea Fleet of the Ministry of Defense. The sanctions list also included the pro-Kremlin “First Movement” for children and youth, created on the initiative of Vladimir Putin, and the head of the main headquarters of another Kremlin youth project, “Yunarmia,” Olympic champion gymnast Nikita Nagorny.