Traders Prepare to Ditch Moscow Ruble Rate as Market Split Grows
- Trade group suggests use of offshore rate in derivatives
- Proposal came amid split in Russian local, foreign FX market
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Currency traders are preparing to jettison Russia’s local exchange rate for the ruble on some transactions, a sign of the growing split between the country’s domestic currency market and its international counterpart since the outbreak of the war in Ukraine.
The Trade Association for the Emerging Markets is recommending that, starting on June 6, traders use pricing data from WM/Refinitiv as a primary settlement rate option for some derivative contracts, according to an April 20 statement. That could come as a relief to traders who had questioned the reliability of the ruble’s foreign-exchange rate since Russia was slapped with wide-reaching sanctions and imposed capital controls after the invasion.