Russian ruble climbs amid new currency controls but 'this is not a pure market'

• The Russian ruble continued to edge higher against the dollar on Friday, though in thin volume.
• On Thursday, the Russian central bank placed new restrictions on local access to foreign-currency cash.

The ruble continued to edge higher on Friday after Russia's central bank unveiled new currency controls to help mitigate crippling Western sanctions over the country's war on Ukraine.

In overnight trade, the ruble rose 2% against the dollar on the Moscow exchange, though the volume remained limited. On Thursday, it added 1.3% versus the greenback. That comes after Russians dumped the ruble Wednesday, when Moscow's exchange reopened it for trading following a pause amid the war in Ukraine.

"This is not a pure market so looking at the pricing it is difficult to know what the level really is," Rabobank currency strategist Jane Foley told Reuters. "The outlook (for the ruble) is completely dependent on whether there is a place for Russian produce and energy again (in the global economy)."

Russia's economy faces an epic crash, with its financial and corporate sectors collapsing under the pressure of Western sanctions. Russia's central bank has more than doubled interest rates to ease the ruble's freefall, among other actions.

On Thursday, the central bank restricted local firms' access to foreign-currency cash for the next six months. The move, which will be in effect until September 10, limits the amount of foreign currency that companies and entrepreneurs can receive to $5,000 and only during business trips.

It marks Moscow's latest effort to preserve hard currency as sanctions have prevented Russia's central bank from accessing upwards of $630 billion worth of international reserves. Russia has already implemented currency controls that blocked foreigners from collecting or selling payments on Russian securities, and also banned banks from selling cash currency to citizens without foreign-exchange accounts.

Despite that, the ruble is down about 30% against the dollar on the Moscow exchange since Russia began attacking Ukraine on February 24.

The plunge has forced even Russian allies like China to protect itself from the ruble. Beijing announced Thursday it would double the margin size against which the ruble could move against the yuan, meaning China wouldn't be responsible for subsidizing Russian buyers of Chinese goods.