Moscow Stock Exchange halves dollars used as collateral for transactions

The Moscow Stock Exchange has said it will reduce the maximum number of dollars it will accept as collateral for transactions, as Russia seeks to reduce its dependence on the currencies of countries that have imposed sanctions on it.

Russian authorities have expressed concern over individuals’ and businesses’ holdings of dollars and other currencies of unfriendly countries, calling for a switch to other alternatives.

The Moscow Stock Exchange – the largest in Russia – has announced that it will halve from August 15 the proportion of dollars in collateral provided by users of its platform to carry out transactions to 25% from 50%.

A collateral transaction requires some type of asset to be provided by a borrower to a lender, usually in exchange for a loan. If the person borrowing the funds does not repay

The pace of de-dollarization in Russia has accelerated since Western countries imposed unprecedented sanctions after Russia sent tens of thousands of troops to Ukraine on February 24. The sanctions have hampered Moscow’s access to global trade and international economic systems.

The Central Bank of Russia announced on Monday its intention to differentiate the cost of foreign currency loans to legal entities and their investments in debt securities depending on whether they are denominated in the currencies of friendly or hostile countries.