The July 2022 surge in foreign currency purchases on the Moscow Exchange by private individuals is explained by a drive to attract dollars and euros from abroad. An investment broker from BCS Mir Investments, Valery Yemelyanov, shared this view in a discussion with socialbites.ca.
He noted that for people able to move money overseas and with overseas accounts, buying dollars and euros represents a straightforward investment idea. They take advantage of a window to acquire the cheaper currency before exchange rate fluctuations narrow the gap.
He added that against the backdrop of Western sanctions on Russia, buying currency through the stock market is not only a less costly method to obtain funds but also offers strong profitability.
In July, the spread between the cash exchange rate and the broker purchase rate exceeded 20 percent. At the same time, the dollar and euro had not been actively traded for years due to robust selling from exporters, which left them undervalued in the stock market.
On August 11, the Central Bank reported a record level of foreign currency purchases on the Moscow Exchange for 237 billion rubles in July. A month earlier, Russians had bought coins totaling 176.1 billion rubles on the site.
This figure marked a record net purchase by private individuals. The Central Bank noted that Russians predominantly acquire foreign currency through banks that transfer funds to foreign accounts.