August 31, 1999

Moscow Interbank Currency Exchange undertakes steps to develop EUREX market in Russia. On September 1, 1999 due to adaptation of the Russian banks and their clients to introduction of Euro, MICEX suspended trading in the foreign currencies — components of the Euro-basket (French francs, Italian lyres, Deutsche marks and Finnish marks). This move is in line with the global FOREX market trend. Its participants have already transferred virtually all their clearing settlements for deals in European currencies into Euro. MICEX CEO Alexander Zakharov thinks that the result of this step will be redistribution of supply and demand in favor of Euro, which in turn will fuel the development of the market, boost its liquidity and serve as a basis for Euro trading in the Unified Trading System mode.

MICEX has been conducting trading in the common European currency Euro since January 1999. After introduction of the Euro trading MICEX considered possibility of suspending trading in the national currencies of the country-members of European Economic and Monetary Union. Euro mechanism stipulated by the Maastricht Treaty envisages that exchange rates of other Euro-basket currencies are to be tightly bound to the exchange rate of the common European currency unit. However following the desire of the trade participants MICEX has been up till present conducting trading in the European currencies of the Euro basket, including Deutsche mark, French franc, Italian lyre, Finnish mark. Simultaneous suspension of trading in these currencies as well as in Euro was caused by MICEX' intention to provide bank-trading participants and their clients with time sufficient to adapt to the new modified conditions of foreign-trade activities.

Since the beginning of the year the process of refocusing to the new European currency involving foreign-trade activities participants goes in line with increasing volume and liquidity of Euro trading: exchange trading net turnover grew from 2.19 mln. Euro in January to 4.46 mln. Euro in August. Trading in other Euro-basket currencies is mainly characterised by decreasing turnover. These factors served as a ground for the decision on suspension of trading in Euro-basket currencies made by MICEX Exchange Council.

Thus, starting from September 1, 1999 MICEX Currency Market Section is conducting trading in seven foreign currencies including USD, Euro, BrP, SwF, JaY, UkH and KaT.