Is Now the Best Time to Buy Rubles Amid the Russia-Ukraine War?

The Russian ruble recorded an all-time low of less than $0.01 on Feb. 28 and didn't show any signs of slowing down on March 1. With the ongoing war between Russia and Ukraine, is now a good time to buy rubles?

It isn't often you see the value of the ruble this low, so it’s safe to say the Russian economy is in a very volatile market. Stocks and Russian-based securities may be a risky investment, but some people think that purchasing the ruble could be a safer pick.

The Russian ruble is currently worth around $0.0088, after falling over 30 percent in the past week. On Feb. 28, the currency’s value fell nearly 20 percent. Banks and other financial institutions have placed restrictions on non-residents of Russia purchasing rubles.

Along with restrictions and bans on trades involving the ruble, the Bank of Russia reportedly raised interest rates to 20 percent on Feb. 28 from 9.5 percent, according to The Wall Street Journal. The New York Stock Exchange and Nasdaq both announced that they have suspended trading of various Russian stocks.

Russia’s Moscow Stock Market is closed for the second straight day, and Russian stocks have fallen nearly 50 percent in the past week. The ruble is tied to the Russian economy, so the steep price drops in Russian stock, securities, and currencies are linked back to the Russia-Ukraine war. Financial institutions and analysts have recommended that retail investors don't attempt to purchase Russian stocks in the hope of making a quick profit.

If you were able to purchase rubles, they can be thought of as an investment if you hold them in an online foreign exchange account. You could exchange the rubles back to dollars when the value goes up. The physical currency could also potentially be valuable if you plan on visiting Russia and spending the local currency there, assuming the value goes up by the time you visit.

While it could seem like a great investment to purchase rubles at the current price, the Russian economy is in a highly volatile and bearish state. There isn't an estimation of when the ruble's price will increase. The price of the Russian currency could continue to drop even more, which could make your holdings even less valuable. If you weren't familiar with the Russian economy before its war with Ukraine, it may be best to wait to purchase the currency.

Purchasing the ruble may be difficult to do in itself because various exchanges and banks have limited or banned non-residents of Russia from purchasing the currency. Exchange rates can also be costly depending on the amount of ruble you plan to purchase. Considering the country’s current economic situation, exchange rates could rise.