American dollar and Russian ruble
At least six banks have started cautiously returning to the Russian bond market, reported Reuters today. JP Morgan, Bank of America, Citigroup, Deutsche Bank, Barclays and Jefferies are all reported to have started once again facilitating trades in Russian government and corporate bonds for their clients.
A spokesperson for Deutsche Bank confirmed to The TRADE that the information on its Russian bond trading activities was “factually correct”.
Most banks halted their Russian debt trading earlier this year following heavy sanctions imposed by the US, UK and Europe in response to the Russia-Ukraine conflict, as reported by The TRADE.
A spokesperson for Deutsche Bank confirmed to The TRADE that the information on its Russian bond trading activities was “factually correct”.
Following a ramping up of US sanctions against Russia, the Treasury prohibited market participants in the US from purchasing both new and existing debt and equity securities issued by a Russian Federation entity, causing most banks to cease their activities. JP Morgan, one of the last banks to exit, halted trading in June.
On 22 July, new guidelines from the Treasury allowed holders to start winding down their positions again, within the parameters of current sanctions, allowing investors to exit their toxic positions. The US Treasury approved an auction in credit default swaps sold on Russian bonds late last month, with the Office of Foreign Assets Control (OFAC) issuing licenses for the auction and associated wind-down activities, following a group request by market participants.
The Treasury also clarified that banks would be allowed to facilitate, clear and settle transactions of Russian securities in order to help their US clients wind down their positions. A Treasury spokesperson said the move was designed to help US and global investors make a clean exit from their Russian holdings.
It would now appear that activity is being cautiously resumed, with most of the banks operating on a request-only, case-by-case basis.
Citi, Bank of America and Jefferies declined to comment. JP Morgan and Barclays had not responded at the time of publication.