How War and Sanctions Make the Ruble Harder to Trade

The blast of sanctions against Russia following its invasion of Ukraine sent its currency plunging, splitting prices for rubles traded inside Russia from those quoted offshore by international banks. When trading in Moscow resumed, it was clear the currency had effectively devalued by 25% or more, its biggest drop since the Russian annexation of Crimea in 2014. That was followed by a blistering rally back to pre-invasion levels as Russia forced buyers to pay in rubles for its oil and gas. Some currency strategists say the market is still broken because of capital controls, forced dollar sales and ultra-thin volumes.

Before the war, the ruble was traded round-the-clock in the interbank market. It also changed hands on the Moscow Exchange between 7 a.m. local time and 11:50 p.m., one of the longest trading days in the world and coinciding with the busiest phase of the foreign-exchange market, when London and New York are both open. Those hours were temporarily shortened to between 10 a.m. and 7 p.m. in early March. Trading volumes have shrunk to their weakest in a decade, based on the 20-day moving average.