Expert Opinion: Russian Businesses to Overcome Sanctions on Moscow Exchange, Short-term Challenges Anticipated

Sanctions targeting the Moscow Exchange (Moex) have led to the suspension of trading in US dollars and euros on the country’s leading financial marketplace, which could impact Russian international trade in the short term. Nevertheless, the country is expected to adapt to these challenges. An acceptable solution may be reached within a month, Alexander Korbut, an independent agri-marketing expert, said in a discussion with Agroexpert.

The U.S. Department of the Treasury has added the ‘Moscow Exchange’ group of companies to its sanctions list against Russia, clarifying that the sanctions don’t extend to food and agricultural products. In response, Moex has suspended trading in US dollars and euros. The Bank of Russia said that it will use data from bank reports and over-the-counter trading to set official exchange rates.

“I won’t say that I see any positives in this situation; however, I don’t see any crucial negatives either, and that is the key,” said Alexander Korbut. He considers adaptation to these challenges achievable, expecting “no collapse in the foreign exchange market.” Furthermore, it is likely that regulators, such as the Ministry of Finance and the Central Bank, foresaw these events and are set to enact a prepared response. Lastly, Russian businesses have a history of operating under external challenges.

According to Korbut, this would lead to an increase in export payments in rubles, foster the concept of settlements with EAEU and BRICS countries using digital financial assets, and likely result in tighter control of the over-the-counter foreign exchange market. “Regulating this type of market poses significant challenges, but I believe the Central Bank is prepared to handle them. It’s possible that the situation will stabilize within a month, followed by necessary adjustments,” stated Alexander Korbut.