The imposition of restrictive measures on the Moscow Exchange was anticipated. Therefore, their impact on the ruble was short-term and minimal when the switch to the over-the-counter (OTC) mechanism of determining the ruble/US dollar and ruble/euro rates was carried out.
The Bank of Russia developed the necessary procedures for such a scenario in advance. The regulator is constantly analyzing an array of OTC transactions, including in terms of whether their impact on the official rate is justified. At present, foreign exchange transactions are performed on market terms.
The Moscow Exchange Index continued to decline in June (-2%) amid new sanctions and the adjustment of expectations about the key rate path. The Index was mainly supported by purchases of non-bank financial institutions as part of trust management.
The revision of monetary policy expectations also impacted the market for government bonds: OFZ yields were up by 55 basis points on average. In such circumstances, the Russian Ministry of Finance placed around half of the planned amount of securities in 2024 Q2.
More details are available in the new issue of the Financial Market Risks Review.
Preview photo: Pavel Nesvadba / Shutterstock / Fotodom