New US sanctions targeting Russia’s financial system have forced the Moscow Exchange (MOEX) to suspend trading in dollars and euros, as reported by Reuters on Wednesday. The move comes as Washington aims to restrict the flow of money and goods supporting Russia’s ongoing war in Ukraine.

Both the exchange and the central bank swiftly released statements within an hour of the sanctions announcement, despite it being a public holiday in Russia. The central bank assured that while banks, companies, and investors will no longer be able to trade these currencies via the central exchange, they can still do so over-the-counter (OTC) through Russian banks. The bank also reassured that deposits in dollars and euros remain secure.

Following the sanctions news, some banks immediately adjusted their dollar rates, with wide spreads between buy and sell rates. Norvik Bank announced it would buy dollars for just 50 roubles and sell for 200 roubles or four times the buy rate. It later adjusted the rates to 88.20/97.80. Tsifra Bank offered a slightly narrower spread, buying dollars at 89 roubles and selling at 120. Other major banks were less opportunistic, quoting 6-7 roubles between their buy and sell rates.

As Russia pursues closer ties with China, the yuan has become MOEX’s most traded currency, accounting for over half of all foreign currency traded in May. A person at a large, non-sanctioned Russian commodities exporter told Reuters that they don’t care about the sanctions, as they have yuan and getting dollars and euros in Russia is practically impossible.

Also read: Kazakh Banks Halt Money Transfers from Russia to China

This development does not come as a surprise, the central bank has been preparing for such sanctions for around two years and has modeled various scenarios with forex market participants and infrastructure organizations. The new sanctions are expected to hit MOEX’s profits by reducing trading volumes, which have seen significant growth in recent years.

Experts advise against panicking and rushing to buy currency, warning that ignoring this advice could lead to serious consequences.

Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.