The Central Bank of the Russian Federation has announced a new approach to calculating exchange rates that aligns with ongoing sanctions against the Moscow Exchange. This shift, reported by Vedomosti, outlines a methodology designed to reflect interbank trading activity more directly on a day ahead basis and to reduce reliance on wider market extremes.
Under the new rules, the official dollar and euro rates will be determined using data from over‑the‑counter bank transactions occurring on the trading day prior to 15:30 Moscow time. The calculation will exclude the lowest and highest transaction values, focusing instead on a central tendency derived from the remaining data. The Bank of Russia intends to derive extreme rates by multiplying the difference between the observed maximum and minimum transaction values by a factor of 1.5 when processed against the lower 25th percentile benchmark. This adjustment aims to stabilize reported levels while preserving sensitivity to the distribution of interbank activity.
Once the relevant values are identified, the central bank will apply a weighting mechanism that scales impact according to the size of each transaction. In practice, larger interbank trades will exert a greater influence on the official exchange rate than smaller deals, echoing principles of market microstructure that give more weight to economically meaningful transactions.
Another rule addresses limited market participation. If fewer than three banks participate in a given day’s FX market, both that day’s results and the previous day’s figures will be considered in the final calculation. This safeguard is intended to ensure continuity and reduce excessive volatility when liquidity is sparse, a scenario that has cropped up in the wake of the sanctions regime.
For currencies other than the yuan, the central bank will determine values by referencing the official dollar rate set by the Bank of Russia. In doing so, it will rely on published exchange rate data provided by other leading central banks, creating a cross‑border reference framework intended to maintain coherence with international monetary policy movements. This approach signals an effort to anchor domestic benchmarks to globally recognized standards while maintaining Moscow’s monetary independence amid sanctions pressure.
In June, the United States Treasury imposed sanctions related to the Moscow Exchange and the National Clearing Centre, highlighting that capital controls adopted by Russian authorities have widened opportunities for Russian nationals and others to benefit from sovereign debt and defense sector activities. The Treasury’s actions underscore a broader goal of restricting access to certain financial channels while signaling potential avenues for sanctioned entities to operate within a constrained set of rules. These developments reflect a wider pattern of financial diplomacy and enforcement accompanying the current geopolitical climate, with market participants closely watching how these measures interact with domestic policy and international liquidity
Earlier reports indicated that the Central Bank would discontinue publishing statistics on the over‑the‑counter foreign exchange market, a move that would reduce the amount of raw data available to observers and analysts. The decision aligns with efforts to recalibrate transparency in the wake of sanctions and regulatory changes, though it also raises questions about how market participants will gauge sentiment, liquidity, and pricing under the new framework. As the policy moves forward, observers will be assessing how the revised methodology affects volatility, hedging dynamics, and the overall reliability of the ruble exchange rate in international markets. Overall, the adjustments suggest a deliberate recalibration of Russia’s currency regulation to balance internal stability with external pressures, while maintaining alignment with broader financial governance objectives. (Source: Vedomosti)