Russian FX Volumes Drop 14% in July MoM, Increases 27% YoY

Russia’s main financial trading venue reported trading metrics for the month of July. Total value across asset classes including, securities,

Micex resizedRussia’s, Moscow Exchange MICEX RTS, the largest exchange in Russia and Eastern Europe recorded positive trading volumes for the month of July against figures from 2012 in the same month. The value traded across all asset classes totalled RUB 43,978 billion, (US $1,334 billion) a 21% increase over the same period in 2012.

Moscow has been gradually developing its position as a regional financial epicentre, since the merger between the country’s equities and derivatives exchange the region has benefited from a diverse range of financial products. Trading in the Russian rouble has been bolstered by interest in energy trading and the nation’s central bank’s liberal policies, thus attracting more participants to trade the EM currency.

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Founder of R5, Jon Vollemaere, an emerging market focused firm shared his thoughts on the growth of trading in the rouble, he said in a statement to Forex Magnates: “Rouble goes from strength to strength. What’s noticeable is how much of the traded volume now comes from non-traditional members and outside Russia. A direct result of the changes Moscow exchange has put in place over the last year.”

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Tim Bevan. Head of International Sales DMA and Prime Brokerage at BCS

Average daily trading volume at the Moscow exchange in currencies reached $19.4 billion, a decrease of 14% from a month earlier where the exchange hit a record of $22.6 billion ADV.

“The RUB continues to grow in importance and liquidity as an emerging market currency,” Tim Bevan. Head of International Sales DMA and Prime Brokerage at BCS a Russian financial services firm based in London in a comment to Forex Magnates.

Trading metrics for July 2013:

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Securities market

  • July’s trading value in stocks, Russian Depositary Receipts (RDRs) and investment fund units totalled RUB 686 bn (July 2012: RUB 824 bn).
  • Total trading in corporate and government bonds (OFZs) amounted to RUB 1,046 bn (July 2012: RUB 1,014 bn). Corporate bonds posted the largest trading value growth, at 13% YoY.
  • In July a total of 26 bond issues for a combined value of RUB 194 bn were placed on the Exchange’s Securities market.

Derivatives market

  • In July derivatives trading totaled RUB 3,941 bn (July 2012: RUB 4,337 bn). The average daily value traded in futures and options was RUB 171 bn.
  • Total value traded in options was RUB 316 bn (July 2012: RUB 284 bn).

FX market

  • July’s total value traded on the FX market was RUB 14,717 bn {$19.4 billion (July 2012: RUB 10,657 bn $14 billion) including spot trades of RUB 5,302 bn (36% of total) and swap trades of RUB 9,415 bn (64%).
  • The July average daily value traded on the FX market was RUB 639 bn.

Money market

  • In July the total value of repo trades with the Central Counterparty was RUB 256 bn. This service, which allows market participants to trade without bilateral limits, was introduced on February 5, 2013.
  • In July the total value of bilateral inter-dealer repo trades was RUB 22,218 bn (July 2012: RUB 18,627 bn). Average daily value amounted to RUB 966 bn.

New pairs RUB/CNY

Among the BRIC nations, China and Russia established cross currency transactions in 2010. The initiative has been welcomed by corporates and banks from both countries, the China Foreign Exchange Trade System said in a statement on their website that “(the new offering will help) facilitate bilateral trade between China and Russia and help develop Yuan trade settlements.”

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Jon Vollemaere, Founder R5

Mr Vollemaere concluded: “The other thing to watch is emergence of tthe RUB / CNY pair. Location based trading aside – it’s an attractive pair to trade.”

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