The Moscow Exchange (MOEX) initiated trading on the Turkish lira on January 29. The initial launch saw trading on the TRY/RUB currency pair reach a first-day volume with turnover of 1.5 million RUB, roughly equivalent to 100,000 TRY.
The MOEX launch of Turkish lira trading was conducted in a limited capacity. Only same day settlements are currently available, with overnight positions expected to be incorporated at a later date. Moreover, margin requirements were initiated at 100% of the total trade valuation.
Igor Marich, Managing Director of Money and Derivatives Markets at Moscow Exchange, provided additional information regarding the implementation of the Turkish lira into the exchange. Mr. Marich indicated that the move by MOEX will help “clients of banks and brokers that conduct cross-border operations between Russia and Turkey.”
Rising Trade Volumes
Moreover, the MOEX announcement notes that foreign trade volumes between the two countries have been on the rise over the past year. In 2017 alone, the aforementioned trade volume surpassed $20 billion, posting a rise of roughly 40% from the preceding year’s levels. Governments, companies and individuals, who engage in global trade often hedge their currency risks by holding varying amounts of the foreign currency of the respective countries, in order to limit the potential risk associated with fluctuations in the currencies’ values.
MOEX Making Moves
The Moscow Exchange continues to broaden its horizons. In addition to expanding its ruble currency offerings, the exchange recently formed a partnership with Thomson Reuters, which provides a mutually beneficial link for both parties.
MOEX benefitted from an influx of new investors, brought forth by Thomson Reuters’ trading platform, while the latter was able to improve its ruble liquidity levels, which had previously been relatively stagnant relative to many other global currencies.
Another example of MOEX adding new instruments was the launch of FX option contracts for GBP/USD and USD/JPY, which took place in October of last year.
In that case, the Moscow Exchange teamed with Russian investment bank Renaissance Capital to maintain its market making needs.