Russia-Ukraine war: Ruble crashes to less than one cent as MOEX Russia Index remains closed

The Russian ruble is now worth less than a cent against the United States dollar.

The plunge will further punish Russians, pushing up the price of many goods and services.

The currency has been in free fall after the West imposed crippling sanctions on Russia in response to Vladimir Putin's invasion of Ukraine.

As part of an international reaction to the invasion, the United States has prohibited American dollar transactions with the Russian central bank — a move that could make Russia's $630 billion of foreign currency reserves redundant.

The Russian President has also been personally targeted with financial measures, along with the country's wealthy oligarchs.

And Russian banks have been banned from the SWIFT interbank messaging network, its planes shut-out from US and EU airspace and Russian state-media has been widely blocked.

Russia could default on bond payments

As the country reels from the impact of the ruble collapse and the biting sanctions, multinational investment bank JPMorgan is warning that Russia could default on bond payments.

"The sanctioning of Russian government entities by the United States, countermeasures within Russia to restrict foreign payments, and disruptions of payment chains present high hurdles for Russia to make a bond payment abroad," JPMorgan said in a note to clients.

"Sanctions imposed on Russia have significantly increased the likelihood of a Russia government hard currency bond default."

Russia has about $40 billion worth of international market debt and any missed payment could trigger a chain reaction.

Russia is the world's 12th largest economy and a default in 1998 sparked a global crisis, partially because of the cost of the first war in Chechnya.

And Russian assets are becoming toxic.

"Russia is simply unbankable at this stage and anyone holding Russian assets will find their book value marked at zero till we find a way out of this," chief portfolio manager at Ark Capital Management Dubai Ltd Saed Abukarsh told Yahoo Finance.

Foreigners hold around half of Russia's hard currency debt. With such harsh sanctions imposed on Russia, Putin may not have the appetite to pay.

MOEX Russia Index remains closed

The MOEX Russia Index has remained closed for a fourth straight day.

The Russian stock exchange is expected to fall off a cliff when it reopens — with investors desperate to sell.

On Tuesday Russia's central bank increased the country's key interest rate from 9.5 per cent to 20 per cent.

The move was "designed to offset increased risk of ruble depreciation and inflation," the country's central bank said.

It also announced it would free 733 billion rubles in local bank reserves to boost liquidity.

The central bank declared that Russian resident companies that earn income from exports from Monday will have to sell 80 per cent of their foreign currency earnings.

Oil price surges

Oil prices soared Wednesday above US$113 per barrel and natural gas hit a record peak before edging off their peaks, as investors fretted over key producer Russia's intensifying assault on Ukraine.

European benchmark Brent North Sea oil struck US$113.94 per barrel, the highest level since 2014, while New York-traded WTI hit a nine-year high of US$112.51 as both posted day rises of almost 8 per cent before dropping back to gains of nearer 4 per cent.