Moscow Exchange Reports $335 Billion in October FX Volumes

Currency trading at Moscow Exchange (MOEX) continued its upward route in October as inflation fears and central banks’ policy reviews sparked a fresh wave of speculation and hedging activity.

Average daily volumes reached RUB 1.18 trillion ($16.6 billion) in the last month, up 5.7 percent against RUB 1.14 trillion ($15.7 billion) in September, Moex said in a statement. Year-over-year, the ADV figure was down 5 percent from RUB 1.35 trillion ($17.5 billion) in 2020.

However, MOEX’s total FX market turnover fell to RUB 24.9 trillion ($335 billion) last month, slightly down from the RUB 25.3 trillion ($350 billion) exchanged hands in September 2021. Compared with volumes from the same month a year earlier, this figure was also down 17 percent when weighed against RUB 29.9 trillion in October 2020.

Delving further into the details, October turnover included spot trades of RUB 7.7 trillion ($107 billion) and ‎swap trades coming in at RUB 17.1 trillion ($247 billion) compared with RUB 6.8 trillion ($93 billion) and RUB 18.5 trillion ($255 billion), respectively, the previous month.

The metrics show that spot volumes, in particular, continue to surge, and the momentum seen throughout September had continued into October. On the other side, the drop in MOEX’s FX turnover is primarily caused by the fall in FX swaps, used mostly for liquidity management and hedging of foreign currency portfolios. In 2020, the foreign exchange swaps accounted for nearly 50 percent of the total FX market turnover, according to the BIS triennial survey.

Russia’s largest bourse attributed the growth to its new products and upcoming regulatory changes, which helped increase the share of interest swaps in total market turnover to 40 percent. Moscow Exchange’s derivatives are offering lines up swaps, FX swaps, cross-currency swaps, FX forwards and options with maturities from 3 days to 5 years.

MOEX, in particular, continues to develop its infrastructure as part of a state-backed drive to make Russia’s largest institutional trading venue one of the world’s leading financial hubs. Most recently, the exchange raised its stake in BierbaumPro AG, whose main asset is the OTC FX platform NTPro. The transaction increases MOEX’s ownership from 29.5% to 95%, the exchange operator said on Thursday.

In March 2020, Russia’s mega bourse purchased a minority stake in BierbaumPro AG in a deal aimed to boost its foreign exchange franchise. At the time, both parties agreed to consolidate the ownership of MOEX up to 100% of BierbaumPro’s equity over three years. The final price, however, wasn’t disclosed and the exchange said it will depend on the company’s operational and financial performance.