Russian FX Dealer VTB Capital Forex Suspends Trading, Cites Sanctions

VTB Group earlier asked corporate clients to stop USD and EUR transactions.

The FX dealer will close all positions at the end of Friday.

Though the Western governments imposed sanctions on many Russian financial institutions after the Russian invasion of Ukraine, the forex dealer particularly highlighted the sanctions on VTB Bank, which is its supplier of quotations.

It has already stopped traders from opening any new position and is allowing the traders to close the existing ones. The broker will forcibly close all open positions at the end of Friday.

“The positions of those clients who do not close them by 23:59:59 Moscow time on February 25, 2022, will be closed by the Company forcibly at the rate of the last indicative quote of the trading day on February 25, 2022. Please note that all pending orders in the specified period will be canceled,” VTB Capital Forex stated in its press release (translated from Russian).

“The company, together with VTB Bank (PJSC), is currently developing a procedure for eliminating or minimizing the negative consequences of anti-Russian sanctions measures. The Company will resume trading operations in the near future.”

The forex dealer, however, highlighted that all the non-trading orders, including deposits and withdrawals, will be processed as usual.

A Financial Breakdown？

The trading suspension came a day after the VTB Group asked its corporate customers to refrain from executing transactions in U.S. dollars and euros. This, according to them, would ‘minimize risks given the current situation’.

The Russian invasion of Ukraine on Thursday has started havoc in the financial market: the Russian stock market nosedived, global stock indices dropped, and crude oil prices breached the $100 mark. But, the traders sentiment cooled off on Friday as all the markets saw significant recovery.

Though current sanctions are mostly limited to financial institutions that are aimed to break the countrys economic backbone, there are also possibilities of much harsher sanctions if the invasion continues.