As the financial markets in Russia have been suffering intensely during the past months, we are seeing new tools introduced by the Moscow Exchange to assist companies to tackle their FX exposure as well as to reduce investment and operational risks. According to an announcement by the Moscow Exchange, a new set of tools will be made available to the local market participants.
As volatility on the Russian ruble FX market has been rising steadily since the Ukrainian conflict shattered financial markets in the region, the need for currency hedging tools has been increasing. The Moscow Exchange will be launching cash-settled FX futures on the USD/RUB pair starting next Monday. According to the announcement, the expiry date of the contracts can be on any given day and with any underlying asset size.
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Parties willing to trade the new instrument have to deposit $1 million with the Guarantee Fund with both Russian rubles and foreign currency being eligible as collateral. The offering is part of the Standartised OTC Derivatives market which was created after the Pittsburgh G20 resolution back in 2009 as an over-the-counter (OTC) market with a central counterparty to limit the risks arising from global derivatives transactions.