A group of Russian private investors filed a class action lawsuit against the Bank of Russia on Monday for its handling of trading activity on the stock exchange on the day President Vladimir Putin launched his invasion of Ukraine.
Russia commenced its full-scale invasion of Ukraine at about 6 a.m. local time on February 24, 2022. The Moscow Stock Exchange opened trading at 7 a.m. local time but stopped trading less than an hour later. During that short period, the Moscow Exchange index fell by more than 11 percent and the collapse continued when trading resumed. By the end of the day the Russian stock market had experienced a record collapse, falling by 33.28 percent.
The volume of stock trading on the first day of Putin's full-scale invasion of Ukraine amounted to 374 billion rubles (about $4 billion), independent news outlet Meduza reported.
The 16 investors who have filed the lawsuit have demanded that the central bank's instructions to stop trading at 7:52 a.m. Moscow time on February 24, 2022, and to resume trading at 9:50 a.m. local time, be declared invalid. The plaintiffs have also asked the court to declare the central bank's "inaction" illegal.
A preliminary court hearing is scheduled for November 27.
Newsweek has contacted the Bank of Russia via email for comment.
The Russian currency has slumped amid Western sanctions imposed on the country in response to Putin's decision to invade his neighbor.
Russia was kicked out of the SWIFT global banking system, while Western nations blocked Moscow's access to some of its foreign reserves. Europe also froze purchases of Russian oil and gas, and in December 2022, the G7 agreed on a price cap on Russian crude and refined petroleum products, putting further strains on the ruble.
In August, the Bank of Russia announced that it would halt purchases of foreign currency on the domestic market for the rest of the year after the ruble slumped toward 100 per dollar, its weakest level in 16 months.
A month earlier, Anatoly Aksakov, a member of Russia's lower house of parliament, the State Duma, said that the ruble's collapse has partially been caused by the need to inject funds into the four Ukrainian regions that were annexed by Putin in September 2022.
He said the price of Russian oil affected the ruble exchange rate, but the cost of spending in the "new territories" also played a role, the Russian state-run news agency Interfax reported. He was referring to the annexed regions of Donetsk, Luhansk, Kherson and Zaporizhzhia. Russia is not fully in control of any of the regions, and foreign governments, including the United States, said the move was illegitimate.
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Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Isabel van Brugen is a Newsweek Reporter based in Kuala Lumpur. Her focus is reporting on the Russia-Ukraine war. Isabel ... Read more
