08/27/1998 11:53:02 FOCUS-Rouble exchange trade suspended in Moscow
By Karl Emerick Hanuska
MOSCOW, Aug 27 (Reuters) - Russia's central bank suspended
all rouble foreign exchange trade on the Moscow Interbank
Currency Exchange (MICEX) on Thursday, bourse officials said
after opening trade showed the currency headed for a sharp drop.
Trade across the country was sparse with banks and exchange
booths on the street equally unwilling to part with dollars and
other hard currency.
Traders at MICEX on Thursday had bid 8.2 roubles to the
dollar against offers of 9.5 roubles, while the central bank had
set its official daily rate, and the starting rate for exchange
trade, at 7.86 roubles to the dollar.
On the St Petersburg Currency Exchange, a regional exchange
much smaller than MICEX, the dollar was trading at 9.5 roubles,
on turnover of only about $17 million, compared with 8.24
roubles to the dollar on Wednesday.
The central bank also cancelled MICEX dollar trade on
Wednesday, when the rouble looked poised for a slide, but
allowed trade of secondary curencies, including the mark,
against which the rouble fell 40.8 percent to fix at 7.6 per
MICEX said trade on its electronic SELT system, which
handles much lower volumes than the main exchange, would
continue on Thursday.
The MICEX trade would have led to a fix, the best indication
of rouble value in an extremely thin and nervous market. But
there has been no dollar-rouble fix for two days due to central
Demand for dollars exceeded offers on MICEX by $290 million,
the exchange said before the central bank suspended trade.
Banks on the SELT system were bidding to buy dollars for
settlement at rates of 11.1 roubles to the dollar.
The rouble was at around six to the dollar only two weeks
ago, before the central bank announced a de facto devaluation by
raising the upper band of its official corridor to 9.5 to the
dollar from 7.13 previously.
The currency's fall has prompted large numbers of Russians
to convert their savings into safe-haven dollars if they are
able to find banks selling them.
But retail trade of the currency has shut down in points
across the nation, beginning with far eastern Vladivostok.
Some stores have closed down as they puzzle over what prices
The central bank vowed on Wednesday it would no longer
intervene heavily on the foreign exchange market as it was
virtually the only seller of hard currency for roubles.
It said it had spent $8.8 billion in July and August to prop
up the rouble. Its gold and hard currency reserves had fallen to
a two-year low of $13.4 billion on August 21 from $15.1 billion
a week earlier.
The bank said its remaining reserves are needed to meet the
urgent needs of the government and suport a minimal level of
Some analysts have said the central bank's effective
reserves are only worth about $6 billion as much of its reserves
are highly illiquid.
((Moscow Newsroom, +7095 941-8520