Why is the ruble not available for forex trading?

Why is the Russian ruble not available for currency 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 unavailable for brokerage trading due to Russia’s invasion of Ukraine.

The war against Ukraine, which Russia started in February 2022, has prompted a series of sanctions against Russia from 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. Exchanges of currencies, such as US dollars to Russian rubles and euros to rubles, were also blocked by most brokers.

Due to these sanctions, the value of the Russian ruble has been disconnected between its listing in Russia and the listing outside of Russia by foreign central banks. This disparity creates extreme currency volatility in ruble pairs, especially the pair USD/RUBincreased spread and gap risk when trading the ruble with major currencies such as the US dollar and the euro.

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 crackdown prevents Russia from conducting financial transactions with other countries and, along with the many other sanctions, threatens to cause the collapse of the Russian currency.

USD/RUB exchange rate

Since February 2022, the USD/RUB rate has risen from 75 to 139 and has fallen back to 52. During the summer, the USD/RUB pair has risen twice more to levels near 110, but also traded between around 55 and 65.

Despite the fleeting gains, the strength of the Russian ruble, which is 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 against Russia as the US, which also makes the EUR/RUB pair unavailable for trading by many brokerage firms.

In early March 2022, the EUR/RUB rate rose to 148.38 after trading between 82 and 91 the year before. The rate then fell to trade between 55 and 65 from mid-June to mid-July.

The ruble as controlled currency

In March we wrote about correlations between USD/RUB and other emerging markets in Europe such as Hungary (HUF), Poland (PLN) and the Czech Republic (CZK). However, with the positioning 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 price 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 such as oil and wheat.

Capital controls adopted by Russia include a 1,050 basis point increase in domestic interest rates that came days after Russia invaded Ukraine and a requirement that Russian companies exchange 80% of their foreign currency earnings with the Russian central bank for 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 FOREX.com.

By Ryan Thaxton, FOREX.com » Official Site

Disclaimer: The information and statements contained in this report are for general information only and do not constitute an offer or solicitation to buy or sell foreign 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 that may arise as a result of any reliance on such information.

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