MOSCOW (Reuters) – New U.S. sanctions that forced Russia’s leading stock exchange to halt trading in the dollar and euro led to a series of price and spread fluctuations as trading moved to over-the-counter (OTC) trading on Thursday, hampering Russian access to reliable prices currency.

Russia’s central bank set its official ruble rate for Friday at 88.21, up about 0.9% from the previous close. However, the sanctions have caused confusion in determining the exact value of the currency.

On the interbank market, the ruble rate fluctuated from a 10-day low of 90.25 to a near-year high of 86.28, finally settling 0.4% higher at 88.62.

The central bank calculated its official rate based on over-the-counter transactions, instead of relying mainly on transactions on the Moscow Stock Exchange, Russia’s leading financial market, as before.

Washington’s sanctions on MOEX and primarily its clearing agent, the National Clearing Center (NCC), had been expected since Russia’s full-scale invasion of Ukraine in February 2022, but the move still caught the market by surprise.

The sanctions led to the suspension of trading in US dollars, euros and Hong Kong dollars on MOEX. The United States has said its goal is to limit the flow of money and goods used to sustain Russia’s war in Ukraine.

MOEX forms part of Russia’s critical financial infrastructure, but the latest sanctions appear to have circumscribed impact on Russia’s ability to continue international oil and gas sales as Moscow has already redirected most of its trade flows to China and other Asian countries.

“Over the last two years, the role of the US dollar and euro on the Russian market has been consistently declining,” the central bank said on Thursday.

The yuan has surpassed the dollar to become the most traded currency with the ruble in Moscow, with a 54% share of the foreign exchange market in May.

The ruble held steady at 12.22 against the yuan and hit a near-yearly high of 11.8430 earlier in the session.

The Russian ruble-based MOEX index fell to its lowest level in almost six months at the beginning of trading, then recovered and closed at an unchanged level of 3,171.7 points. MOEX shares fell about 15% before falling about 3.1%.

VOLATILITY, WIDE spreads

“Sanctions imposed on key institutions of the Russian financial sector are the most serious in a year and a half after the introduction of the oil embargo and restrictions on oil prices,” BCS World of Investments analysts said.

The BCS said that around 60% of foreign exchange trading from January to April took place on the OTC market, so this constitutes a sufficient basis for setting the official exchange rate.

“At the same time, the lack of a single trading floor will lead to an increase in spreads on currency operations by banks.”

Banks, companies and investors can no longer trade the US dollar or euro through a central exchange, which provides benefits such as liquidity, settlement and supervision.

Instead, the foggy OTC market, where transactions are made directly between two parties, will dominate.

“The new sanctions should have no impact on the ruble exchange rate in the medium term,” said Yuri Popov, strategist at SberCIB Investment Research. “In the short term, stocks may experience high volatility and wide spreads.”

Some major brokers have blocked dollar, euro and Hong Kong dollar accounts, preventing deposits and withdrawals.

Sberbank, Russia’s dominant lender, said it was not seeing increased demand for foreign currencies at its branches and currency exchange rates were unchanged from yesterday.