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. Last Updated: 07/27/2016

Exchange Switches to U. S. Clearing Bank

The Moscow Interbank Currency Exchange has chosen Bank of New York to handle clearing for the exchange's hard-currency accounts, replacing the International Moscow Bank.

Alexei Osenmuk, deputy general manager of the exchange, which handles about 75 percent of trade in the Russian ruble, said in an interview that a final agreement with the Bank of New York would be signed within a month.

He said the exchange would replace the International Moscow Bank, Russia's second biggest bank with assets of about $3 billion, which has handled the operation since the exchange opened two years ago. The Bank of New York could begin account settlements by the middle of December.

Osenmuk acknowledged that clearing the day's trade, which averages $55 million, would cost more because Bank of New York charges a commission while IMB does not. But he said members of the exchange wanted a U. S. bank to handle dollar transactions to speed the transfer of client's dollars to other U. S. banks to pay their debts.

The actual time for the accounts to clear will still take two days, as it did with IMB, but since the money will already be on account at a U. S. bank, it will then be easier to send that money to other currency accounts.

MICEX sent a letter to its members this week advising them that those who had not already done so should open correspondent accounts with, the Bank of New York. Those who do not have the right to open accounts with foreign banks will have to open accounts with Russian banks that do.

Yury Kondratyuk, deputy president of IMB, reacted angrily to the news at a press conference this week, saying he was only informed of the decision by the letter sent to all members. He criticized the plan to go with a foreign bank saying it would cost more.