According to a company announcement made by the Moscow Exchange, the company’s FX Market Committee recommended an increase in the price tick last week for the most traded USD/RUB and EUR/RUB spot currency pairs to RUB 0.001 from the current RUB 0.0005.
Rising volatility on the Russian forex market as both oil prices and the geopolitical environment remain unstable is leading to increased fragmentation of liquidity on the Russian ruble currency pairs and is demanding measures from the exchange.
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According to the company’s money market managing director, Igor Marich, “The tick size is an important component of the market microstructure which impacts trading strategies and trading facilities at the exchange.
“The larger tick size for the major currency pairs will deepen liquidity at the bid/offer price and will be beneficial to major brokers. It will also harmonize the tick sizes of Moscow Exchange’s FX and Derivatives Markets,” he explained.
The change in the pricing mechanism is going to take effect in February next year.
Earlier today, the Moscow Exchange announced that it is allowing foreign liquidity providers into its FX market provided that they meet a certain set of capital requirements.