MOSCOW, January 21. Moscow exchange has developed a technology of discrete auction for the currency market, the decision on its introduction can take the CBR. This was announced by managing Director of money market of the Moscow exchange Igor Maric. Discrete auction is a suspension of trading in case of sharp fluctuations of currencies and is designed to smooth out such fluctuations.
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“The exchange has developed a technology of discrete auction for the currency market. The mechanism is similar to that implemented in the stock market. The feasibility of conducting a discrete auction is administered by the Bank of Russia”, – he noted.
That the regulator and stock exchange to develop the technology of smoothing of the jumps of the course, in March 2015, announced first Deputy Chairman of the Central Bank of Russia Dmitry Tulin. Then in November last year he declared that he saw no urgent need for such an instrument. However, from the beginning of 2016 following the sharp fall in oil prices, the ruble has weakened considerably against the dollar and Euro. Brent crude has plunged 27% and is now trading at 28 dollars/Barr. From the beginning, the dollar increased by 12.4% 85,99 rubles/USD. The Euro rose by 13.3% to 93.7 rubles/Euro. A significant weakening of the ruble has led to a revision of the macro forecast and main parameters of the budget.
Discrete auctions are now used by Moscow exchange in the stock market in cases of sharp fluctuations in the share price. During the auction, which usually lasts no more than 30 minutes, is the collection of applications regarding transactions, and then determines a single price at which they are held. This mechanism allows to smooth sharp fluctuations.
The foreign exchange market trading are in normal mode
Maric also said that trading in the foreign exchange market are in normal mode, non-standard behavior of participants no.
“The foreign exchange market trading are in normal mode. Trading volumes exceed the normal daily average indicators, but not significantly. The activity of the bidders (number of transactions) is also at normal level. We haven’t recorded any non-standard behaviour of someone from the participants,” he said. According to Marich, the volatility of the Forex market fits into operational risk models of the exchange.