The Russian invasion of Ukraine erased about $200 billion from the value of shares in the Russian Stock Exchange after ending the trading session with a 33% drop, in the largest decline ever and the third largest decline in the history of financial markets, after announcing Western sanctions.
Shares of Russia’s largest bank, Sberbank, fell by 42%, while shares of the Russian gas giant Gazprom fell by 35%.
The Russian currency also fell to a record level, as the value of the ruble fell by 3.5%, to about 84 against the dollar.
The Bank of Russia said it would intervene in the foreign exchange market for the first time in years and take measures to tame volatility.
The Russian Central Bank did not mention raising interest rates, but said it would provide additional liquidity to banks by offering one trillion rubles, or about $12 billion, in interbank swaps.
The central bank has raised its benchmark interest rate by 525 basis points in the past 12 months to tame inflation.
In the Russian bond market, dollar-denominated bonds lost about $9 billion, or a third of the value of sovereign dollar-denominated debt, after demand for them stopped as a result of sanctions, while the cost of insuring against default rose to its highest level since 2009.
Because of the increased risks, the yield on 10-year ruble-denominated bonds rose by 129 basis points, exceeding 12%.
In addition to this, billions of dollars in losses are added due to the suspension of hundreds of flights and tourism, in addition to the disruption of large parts of the movement of goods and commodities to and from the country.