On June 13, the Moscow Stock Exchange stopped trading in dollars and euros as a result of US sanctions, and determining the ruble exchange rate for settlements with Western counterparties became a creative activity.
In insight “The Arbitration Labyrinth. Sanctions quest for Russian companies in the European Financial System.” we talked about the problems that Russian lawyers face when interacting with American and European colleagues, and also looked for solutions.
Today, colleagues from C Family helped prepare methods for calculating the ruble exchange rate itself.
Moscow Exchange
It does not directly determine the ruble exchange rate, as it was included in the SDN list.
The Central Bank of the Russian Federation
It uses the following calculation method:
- Financial institutions are required to report transactions to the regulator no later than 15:30 Moscow time on each trading day.
- The Central Bank has the right to exclude from the calculation formula transactions made at extremely low or extremely high prices in order to minimize their impact on the average.
- An adjustment for the volume of transactions is also used: larger transactions are more important when calculating the official exchange rate.
- Additional restrictions apply, for example, if one credit institution provides 75% of the currency supply, its transactions may be excluded from the accounting.
Interbank market
With a number of features:
- Participants can agree to change course to speed up the deal depending on the partner's interests.
- Information on trading volumes and the number of participants is not disclosed.
- The interbank market provides a dynamic exchange rate that is difficult to use to predict the official rate of the Central Bank due to the complex calculation formula.
- Intraday exchange rate fluctuations on the interbank market can reach significant values, up to five rubles per dollar.
Financial converters
Yahoo Finance for iOS devices, Google Finance for Google and Android devices, XE for everyone else. Popular converters now rate near the Central Bank, with fluctuations within
Cross rate through yuan.
Count easy enoughif both pairs are known.
For example, if MOEX is CNY/RUB=11.77 and CNY/USD=0.14, then USD/RUB will be 12.84/0.14=84.04
In a similar way, you can calculate the ruble using other currencies that are traded on MOEX.
Cryptocurrency
Stable coins tied 1=1 to the dollar rate, most commonly USDT, are usually used to calculate the rate.
The rate is determined in exchange aggregators and on P2P transactions. Most often, exchange rates and P2P rates do not differ significantly, but P2P may be lower. For example, 93.36 in exchange offices and 93.2 on P2P transactions.
The cryptocurrency market is extremely volatile and exchange rate fluctuations can be significant throughout the day.
Multiplying the average market rate of the base year by the inflation ratio in the two countries.
For example, if over a certain period prices in Russia have doubled, and in the US by a quarter, then the exchange rate should increase by a certain number of percent.
Alfa Bank analysts did this exercise at the beginning of 2024, and it was assumed that the ruble was released freely in December 2014.
Shortly thereafter, the exchange rate of about 80 rubles was set at an alarmingly high rate. Six months later, the dollar fell back to 50 rubles and then fluctuated greatly throughout 2016. The market calmed down only by the beginning of 2017, after which the dollar stabilized for a long time.
The average exchange rate for 2015-2016 was 64 rubles. And we could take it as the original one. A little less than nine years have passed since then. During this period, ruble inflation should have added 79% to the dollar. Dollar inflation will slow down this growth by 31%. Their ratio is +37% compared to the base year, which means that the current rate is 87 rubles per dollar.
Using the “Big Mac Index”.
This method of comparing the real value of currencies at purchasing power parity (PPP) is calculated by the British magazine The Economist and Statista.
For example, if the price of a “Russian” Big Hit is about 186 rubles, and in the US a Big Mac costs $5.69, then the fair exchange rate of the Russian ruble against the US dollar will be 186/5.69 = 32.68.
Market participants and economic analysts face a high degree of uncertainty, which requires more in-depth analysis and a cautious approach to assessing the exchange rate in the current conditions.
Ultimately, everyone now determines for themselves the rate at which they are ready to exchange the ruble for the dollar. Some are waiting for 32 and some are waiting for 200.