How the ruble exchange rate will affect the wallet: possible scenarios

The Central Bank is preparing for sanctions after the suspension of trading on the Moscow Exchange

After the referenda on the entry of four new regions into Russia, there was a threat of sanctions from unfriendly countries against the National Clearing Center (NCC). If it is implemented, there will be a cessation of organized trading in foreign currency on the Moscow Exchange.

The Bank of Russia considers the danger serious, therefore it has already prepared a draft instruction on changing the procedure for calculating and publishing official foreign exchange rates. Until October 9, the document will be under independent anti-corruption expertise. About the rate at which the Russians will have to buy currency and how it will look if sanctions against the NCC are eventually introduced – in the material “MK”.

The document published by the Central Bank of the Russian Federation states that the developed alternative methods for setting the exchange rate, in the event of the termination of trading on the Moscow Exchange, will primarily affect the dollar, euro and yuan. The regulator is considering four scenarios. Currently, the official exchange rate of the American currency is calculated daily for transactions concluded on the Moscow Exchange from 10:00 to 15:30 Moscow time. In this case, the total amount is rounded up to hundredths of a penny. If the NCC continues to operate as usual, the exchange rates will continue to be determined in the same way.

In the second scenario, in the absence of information from the Moscow Exchange, the dollar exchange rate can now be set on the basis of transactions of credit institutions, reports on which are submitted to the Bank of Russia. Only those contracts that were concluded during the current day before 15:30 Moscow time will be taken into account.

If these data are not available, then the official dollar rate will be calculated according to the third scenario. In this case, the regulator will take into account information about transactions concluded on digital OTC trading platforms.

In the fourth scenario, the Central Bank foresaw a situation where there would be no data at all. In this case, the official dollar rate will be set “equal to the value of the previous day.” Similar mechanisms are provided for the euro and yuan. The cost of other foreign currencies will be determined from the ratio of the dollar to the ruble and to these currencies according to the data of the relevant central banks-issuers at 15:30 Moscow time. “Most currency conversion transactions all over the world take place on the over-the-counter market,” Artem Tuzov, Executive Director of the Capital Market Department at IVA Partners Investment Company, commented on the initiative of the Central Bank. – Regulators all over the world have questions about the formation of exchange rates on over-the-counter platforms, therefore, “civilized” exchange trading in currencies to determine the rate is the most preferable.” In second place, it is really worth using transactions of the largest banks to determine the exchange rate: they operate with maximum liquidity and the rate that is set as a result of their transactions can be considered reliable. But an over-the-counter market, with a large turnover of currency trading, could also be a good alternative for the formation of the rate. The fourth method, that is, keeping the exchange rate similar to the last trading date, can only be used temporarily, and then the Central Bank of the Russian Federation can switch to other methods of setting the rate, the expert is sure.

– For Russians, the best is the most representative rate, that is, calculated on the basis of the largest number of transactions in which the Russians themselves can participate – individuals, – says Evgeny Mironyuk, an expert on the stock market at BCS World of Investments. – And if now they can make transactions on the stock exchange, then in the event of sanctions at the NCC, this will not be possible, and the rate of their transactions with banks will become the most representative for individuals. At the same time, the rate of interbank transactions is likely to be different, since spreads, that is, the difference between buying and selling, are much lower in interbank transactions.” This will have a negative impact on the value of the currency, “unfriendly” currencies will rise in price, their rate will approach the rate in exchange offices, and the exchange alternative will disappear.

In the meantime, taking into account the risk of sanctions on the NCC, the cash dollar is gradually breaking away from the non-cash one. “If in summer the difference was 2-3 rubles, then according to cash.rbc.ru, by the middle of the day on October 4, the best rate for buying a dollar is 63.6 rubles, selling – 64.8 rubles,” Mironyuk explains the situation. “The average rate is 64 .2 rubles per US dollar, despite the fact that the exchange rate is lower – 58.9 rubles per unit of US currency. The new method of calculating the exchange rate, which will be used when the restrictions are introduced, will not lead to the appearance of a “fixed exchange rate” for the dollar and the euro. The current state of affairs with the ruble exchange rate indicates that the sellers are “holding” the currency, laying the risk of sanctions on the financial infrastructure, the expert believes.

Read also: “Currency ban: what will happen to the circulation of dollars and euros in Russia”