OREANDA-NEWS. On April 15, 2013 the Moscow Exchange introduced new instruments to trade the currency pair CNY/RUB. The existing list of buy/sell transactions with settlement on the same day (CNYRUB_TOD) was extended to include instruments with tomorrow settlement (CNYRUB_TOM and overnight swaps CNY_TODTOM and CNY_TOMSPT).

The new instruments for the currency pair CNY/RUB are traded from 10:00 until 23:50 MSK, the TOD instruments continue trading until 11:00 MSK.

In addition, for all CNY/RUB trades:

partial collateral is now required. As on April 15, 2013 collateral requirement is at 5% instead of previous 100%;

now collateral may be posted in Chinese yuan for trades in any instruments of the Moscow Exchange's FX market;

fees for the yuan trading have been brought in line with the fees applied to the dollar and euro (the fee for the instrument CNYRUB_TOD was reduced threefold);

the yuan is quoted now per a currency unit instead of 10 yuan.

Thereby, Moscow Exchange's FX market trading conditions for the yuan were aligned with those applied to the U.S. dollar and euro.

On their first day the innovations drove a 150% increase in trading volume compared to average daily values of the 1st quarter of this year. Then the trading volume amounted to CNY16.5 million (RUB83.8 million).

Trades were executed in all instruments for the currency pair CNY/RUB. 17 banks executed 43 trades in the yuan. Bank of China (ELUOSI), Industrial and Commercial Bank of China (Moscow), My Bank, Bank "Levoberezhny" and Commercial Bank "Vostochny" made the first transactions in the new CNY/RUB instruments and swap trades.

By Igor Marich, Managing Director of the Money Market at the Moscow Exchange, the yuan trading is a prospective area of the future market development. He said: "We expect that the expansion of the instrument line for the currency pair CNY/RUB offered by the Exchange will fuel an increase in the yuan trading volume and number of client transactions as well as a use of the yuan in different financial products".

Stanislav Yaryshevichus, Deputy Head of FX & Financial Operations at ING Bank said: "The yuan is a promising instrument which will be developed actively. We hope to see a growing client interest from big Russian and Chinese corporations".

Since April 15, 2013 the market hours for the instrument USDRUB_TOD and swap trades USD_TODTOM have been extended by more than two hours to last until 17:15 MSK and 17:30 MSK respectively.

The move broadens market participants' opportunities for using FX swaps on the Exchange to manage liquidity. In addition, it facilitates availability of the Bank of Russia"s liquidity while it makes FX swaps transactions within the framework of the monetary policy.

During the added hours trading volume in USDRUB_TOD reached USD138 million or 6% of the daily volume in this instrument, in USD_TODTOM – USD1,193 million or 13% of the daily volume.

It is worth mentioning other improvements made by the Exchange to its FX market with effect from April 15, 2013:

launch of new swap trades EUR_TOMSPT;

reduced tick price, from 0.0001 to 0.00005, for instruments EURUSD_TOD and EURUSD_TOM;

provided opportunity to choose the base exchange rate while executing off order book swap trades.

The last point in the list helps substantially easing the procedure for recording off order book swap trades for the clearing with NCC.

As a result of the innovations, trading volume on the market on Monday this week was USD22 billion, up 45% compared to Moscow Exchange"s average daily FX trading volume in the 1st quarter of 2013.