The Moscow Exchange made the announcement that it intended to do so back in December, as the local foreign exchange market liquidity situation had become increasingly challenging.
The price ticks for USD/RUB, EUR/RUB and GBP/RUB spot FX pairs will be doubled to RUB 0.001 from the current tick size of RUB 0.0005.
Overnight, Russia’s credit rating got downgraded to below investment grade by S&P, while Fitch and Moody’s have placed their ratings “under review”.
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The Russian ruble lost almost 6% in trading yesterday in the aftermath of the announcement, as worries about further deterioration in Eastern Ukraine have also played their part in the decline.
The Managing Director of Moscow Exchange’s Money Market, Igor Marich, said, “We are increasing the price tick for major currency pairs in response to demand from market participants. The price tick is an important market parameter that affects trading strategies and the convenience of trading on-exchange.”
“The larger price tick will boost order book liquidity and bring Moscow Exchange’s FX Market in line with our Derivatives Markets, where the price tick is already RUB 0.001,” he explained.
The price tick will remain unchanged for other spot FX instruments and swap deals.