Russian financial markets under pressure as Germany halts Nord Stream 2 pipeline

Russia's stock market and currency, the ruble, took a big hit as a result of President Putin's recognition of former Ukranian territories of Luhanks and Donetsk, as independent states.

The MOEX, Moscow's stock index declined 10% on Monday, which brings total losses since the start of 2022 to more than 20%.

While the ruble declined against the USD to 81 rubles per dollar, a new record low. The steep declines forced the Russian central bank to step in and provide support to financial institutions.

Analysts expect incoming sanctions from the United States and Europe to put further pressure on Russian economy and finances. Today, Germany announced certification of the Nord Stream 2 pipeline has been halted.

Capital Economics analysts expect heavy damage to the Russian economy if Russia is blocked from the SWIFT payments system. So far, sanctions from Western allies have been fairly light and mostly symbolic.