Russia’s Moscow Exchange (MOEX) disclosed that it would include the Turkish lira and Hong Kong dollar in currencies that Moscow will trade with as of 1 March.
The MOEX Russia Index is the main ruble-denominated benchmark of the Russian stock market. MOEX added that its recent decision was due to Moscow’s clients expressing interest in trade using foreign currencies.
According to official reports, Russia’s clients will be allowed to trade with Moscow using the two currencies under specific contracts set to expire in June, September, December 2023, and March 2024.
Vladimir Yarovoy, the Managing Director of MOEX, recently elaborated on how “currency futures” are integral instruments in relation to trading with international investors, and “over 50 percent of the volume of transactions in the derivatives market today is currency derivatives,” adding that the demand for using the Turkish lira when trading with MOEX increased by “seventeen-fold.”
Turkiye’s foreign trade deficit reached $109 billion in 2022, with Moscow being Ankara’s number one trading partner. According to experts, since the start of Russia’s invasion of Ukraine, President Recep Tayyip Erdogan has sought to boost Turkiye’s exports to Moscow to alleviate the effects of the country’s economic decline.
By October 2022, Turkiye’s annual inflation rate had reached a new peak, hitting its highest point in 24 years.
Consequently, in December 2022, a Turkish delegation hosted talks with its Russian counterparts to request a discount on over 25 percent of its gas imports.
Financial data-providing company Refinitiv reported on 22 August that Turkiye had doubled its Russian oil imports in 2022, reaching over 200,000 barrels per day (bpd).
Several Turkish companies have continued to engage in business activities with Russia, while trade between Moscow and Ankara has increased significantly – a direct result of western sanctions and the withdrawal of European businesses from Russia’s intervention in Ukraine. Turkiye did not join its NATO allies in sanctioning Russia, citing continued reliance on Russian energy.