Why is the Russian ruble not available for forex trading?
Currency pairs such as USD/RUB and EUR/RUB are not available for forex trading with most North American brokers, due to Russia’s invasion of Ukraine.
Why is the Russian ruble not available for trading?
The Russian Ruble is currently not available for trading with brokerage houses due to Russia’s invasion of Ukraine.
The war against Ukraine that Russia started in February 2022 has prompted a series of sanctions against Russia by major countries and groups, including the US, EU, UK, Japan, Canada and many others. These sanctions include trade bans on Russian exports and imports, as well as transactions with Russia’s central bank. The exchange of currencies, such as US dollars to Russian rubles and euros to rubles, was also blocked by most brokers.
Due to these sanctions, the value of the Russian ruble has become disconnected between its quotation inside Russia and the quotation outside Russia by foreign central banks. This disparity creates extreme forex volatility in ruble pairs, especially the pair USD/RUBincreased spreads and gap risk when trading the ruble with major currencies like the US dollar and the euro.
A few days after the Russian invasion, the ruble was blocked from the SWIFT network, a global system used by major banks and financial institutions to transfer money. This suppression prevents Russia from carrying out financial transactions with other countries and, together with the many other sanctions, threatens to cause the collapse of the Russian currency.
USD/RUB exchange rate
Since February 2022, the USD/RUB exchange rate has risen from 75 to 139 and has fallen back to 52. Over the summer, the USD/RUB pair has climbed twice more to levels near 110, but also traded between around 55 and 65.
Despite the volatile spikes, the strength of the Russian ruble rising against the US dollar makes it an outlier in the global market. Almost all other major currencies weakened significantly in forex against the US dollar in 2022. The US dollar reached parity with the euro and the GBP/USD pair fell to 1.07, a level not seen since 1985.
EUR/RUB exchange rate
The Russian ruble experienced similar volatility against the euro. The EU has imposed many of the same sanctions on Russia as the US, which also makes the EUR/RUB pair unavailable for trading by many forex brokerages.
At the beginning of March 2022, the EUR/RUB rate rose to 148.38 after trading between 82 and 91 the previous year. After that, the rate cooled to trade between 55 and 65 from mid-June to mid-July.
The ruble as a controlled currency
In March, we wrote about the correlations between USD/RUB and other emerging markets in Europe such as Hungary (HUF), Poland (PLN) and the Czech Republic (CZK). However, with the placement of the Russian ruble as a controlled currency, Russia avoided financial collapse and stabilized the ruble near pre-March levels, and these correlations no longer exist.
As mentioned in the rates sections above, the USD/RUB and EUR/RUB pairs stabilized over the summer to gain strength against the US Dollar and Euro amid the financial turmoil caused by the global bans on Russian commodities like oil and wheat.
Capital controls enacted by Russia include a 1,050 basis point hike in domestic interest that came just days after Russia invaded Ukraine, and a requirement for Russian companies to exchange 80% of their foreign currency income with the Russian central bank against rubles.
Russian citizens are also prevented from transferring foreign currency outside the country and can only withdraw limited amounts of cash from Russian banks.
For future information on the status of the USD/RUB and EUR/RUB pairs, please follow our service updates page. In the meantime, you can trade many other currency pairs with competitive spreads with FOREX.com.
By Ryan Thaxton, FOREX.com » Official Site
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation to buy or sell forex exchange contracts or CFDs. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect or consequential damages which may result from the fact that anyone relies on such information.