Photo source Moscow Exchange official website
htmlOn September 20, the Moscow Exchange announced that starting from October 3, 2022, the foreign exchange market of the Moscow Exchange will suspend trading of pounds. The suspended trades include spot and forward intraday and over-the-counter trading in pound- rubles and pound-dollars. The exchange said the reason for the suspension of business was potential risks and difficulties in settlement of the pound.On September 21, local time, the Russian stock market opened sharply and then fluctuated upward. The Russian RTS index fell by more than 7% during the session, and the MOEX index fell by more than 9% during the session.
US and Brent crude oil rose in the short term, and WTI crude oil rose in the short term. As of press time, the quotation was over $86 per barrel, and London Brent crude oil rose in the short term, with the quotation exceeding $93 per barrel. Spot gold once approached $1,680 per ounce, up 0.48% during the day.
Russian stock MOEX index trend on September 21
According to CCTV News, on the 7th local time, Russian President Putin said at the 7th Oriental Economic Forum plenary session that the United States never restricts itself in order to pursue its own interests. Putin said the United States has undermined the foundations of the world economic order, the dollar and pound have lost credibility, and Russia is abandoning their use.
What is the reason why Russia wants to give up the pound and the US dollar? What impact may it have? Tianmu News interviewed Tan Yaling , director of the China Foreign Exchange Investment Research Institute.
Tan Yaling analyzed that Russia suspended trading of pounds and was concerned about the risks of pounds, which are related to the current depreciation of pounds, and may also be due to the unstable political and economic issues of the UK itself, as well as the unstable trends in monetary policy.
In Tan Yaling's view, Russia has great risks in the future, because Russia's financial market is not sound and the level of currency development is not that good. At this time, more boycott measures will be taken, such as the ruble order, which will increase the scale of its own money supply. If the country's economy is not good and the money supply is very large, economic risks and investment risks will intensify.
In the money market, it is impossible for Russia to isolate itself. Tan Yaling said that because Russia's supply is in demand globally, this interactive relationship will not change, but if extreme measures are taken in currency, the country's currency will not be able to support it, which is shooting itself in the foot.
At present, the hegemony of the US dollar still exists. Emerging market currencies or developing countries currencies should not act rashly if they do not have the ability and conditions to resist the currencies of major developed countries.
"In the US dollar system, boycotting the pound is not very meaningful. The UK London financial center London oil futures is not always priced in US dollars. Even if Russia boycotts the US dollar and adopts the ruble order, the US is still using US dollars to buy Russian oil," said Tan Yaling.
