Prices plummeted around the world after Russian troops invaded Ukraine. But no stock exchange has been hit as hard as the Moscow Stock Exchange. Not only did the ruble plummet, shares in Russian corporations such as Gazprom also reacted to the harsh sanctions imposed by the West.

Many companies have put their business in Russia on hold or have withdrawn completely. The consequences can also be seen in the development of the ruble. Since the start of the Ukraine war, the Russian currency has plummeted, depreciating around 30 percent against the dollar and euro.

After the opening of the stock market in Moscow for local investors last week, Russian stocks rose on Thursday. To limit a sell-off after invading Ukraine, Moscow shut down the country’s main stock exchange for almost a month. Trading had previously halted when Russia’s main stock index plummeted shortly after Russia’s February 24 attack on Ukraine.

The leading Russian index, Moex, gained 11 percent by 10.15 am CET. The Moscow Stock Exchange resumed trading in 33 Russian stocks, including some of the largest companies, for a shortened four-hour trading session Oil giant Lukoil (LKOH) and gas behemoth Gazprom (GAZP) were among the biggest climbers, while Aeroflot (AFLT) fell. Other oil companies also outperformed.

Now Vladimir Putin is trying to stabilise the Russian Ruble. “Unfriendly states” are to pay for gas supplies in rubles in the future, according to an announcement by the Russian president. Mr Putin said last Wednesday he had instructed his government to stop accepting payments in dollars or euros. A payment for Russian goods in foreign currency has “lost its meaning”. Deliveries would continue to be made in full, the Kremlin chief assured during a video conference broadcast on state television.

European gas prices reacted to the announcement with a significant increase of around 20 percent to 119 euros per megawatt (MW) hour. At the beginning of the month it even exceeded 200 euros. The Russian action is directed against 48 states, including all EU countries, but also the US, Canada and Great Britain. The announcement caused the Russian currency to appreciate. Its rate rose from around 106 rubles per dollar to less than 96 rubles. After the attack on Ukraine, it initially depreciated from an average rate of around 74 rubles to 130 rubles but has recently strengthened significantly again.

This forces foreign gas buyers to buy rubles on the foreign exchange market. To what extent the liquidity on the ruble market is sufficient is difficult to say. The market should not be particularly liquid because all Western countries are effectively left out. However, the Russian central bank could theoretically print unlimited rubles and sell them to the buyer countries in exchange for foreign currency, although the exchange rate is questionable. In the end, the foreign exchange would end up with the Russian central bank. The strange thing is that they are sanctioned and the bank’s reserves in the West are frozen. Now Putin is forcing the West to circumvent its sanctions themselves. The main idea is probably to create international demand for rubles. In any case, this will influence the foreign exchange market, because then there will be more buyers and this supports the Russian currency. In principle, Russia is striving to curtail the dollar’s leading role in commodity trading.

For gas supplies, there are long-term contracts that are denominated in dollars, an industry expert says. The “unfriendly states” could not simply accept the announcement, which is a clear breach of contract. The scenario of a complete gas embargo has now become more likely. Many European countries are considering this scenario but are reluctant to follow through for economic reasons. But, increasingly, experts are warning that a waiver of Russian oil supplies is possible because there are significant capacity reserves outside ] Russia. The increase in this alternative supply, and the decrease in demand, would curb a price increase caused by an embargo.

The geo-political monopoly continues, and you must be clear about this: Putin’s regime is a threat to everyone. If it is not defeated or weakened in this warm, and is no longer capable of further aggression, it will not stop in Ukraine. Ukrainians are also fighting for our freedom.


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