Over the years the
foreign exchange market Russia has reflected the general development in the Russian economy and its increasing participation in the world economy. The government of Russia had introduced the rouble convertibility with an eye on the transition of country's economy into a market economy. The foreign exchange rate of Russia has changed from multiple exchange rates, managed floating to soft peg.
The
foreign exchange market in Russia underwent major changes with price liberalizations in 1992 and as a result of that rouble became a genuine and important currency. Dollar is also an important medium of exchange in Russia, but rouble has not been sidelined. Now hard currency can be held in Russia and a common practice among the people of Russia is that they convert the roubles in their possession into dollars and vice versa.
It was in the year 1989 that the Soviet Union introduced flexibility in exchange rates. The allocation of foreign exchange was done through auctions.
In 1991, the Central Bank of Russia created the first currency exchange in the country and in the following year, it was renamed as the Moscow Interbank Currency Exchange (MICEX). This carries out foreign currency trading in Russia.
The
foreign exchange market in Russia is controlled by the Central Bank of Russia. It issues special licenses to the commercial banks and thus controls the internal foreign exchange turnover. There are two kinds of licenses. One of them gives the authorized commercial banks the right to trade in foreign currency both internally and externally. The banks involve themselves in buying foreign currency from exporters and selling them to importers. The Russian foreign exchange market is mostly centralized.
The major currencies traded in the
foreign exchange market Russia are dollar, Euro, Japanese yen and others. The foreign exchange market of Russia is one of those financial markets that have made their marks in the Russia economy. What started as a spot market has now expanded into spot, futures and forward markets.