Russia’s central bank implemented a short-selling ban on Thursday after the country’s stock market plunged.
The MOEX Russia index crashed as much as 50% and erased $259 billion in market value after Russia invaded Ukraine.
The ban is in place “in order to protect the rights and legitimate interests of investors in the financial markets.”
A 50% crash in Russia’s stock market on Thursday after the country invaded Ukraine led the country’s central bank to implement a ban on short-selling.
Short-selling allows investors to profit on the decline of a stock, and the practice can exacerbate an ongoing sell-off. Russia’s ban represents an attempt to stem the decline in the country’s stock market.
“In connection with the current situation in the financial market and in order to protect the rights and legitimate interests of investors in the financial markets, reduce risks and limit excessive volatility, the Bank of Russia ordered brokers to suspend short sales on exchange and over-the-counter market,” Russia’s central bank said.
Russia’s MOEX stock market index erased as much as $259 billion in market value on Thursday, and the index was already down about 20% leading up to Thursday’s plunge. During the latest sell-off, the index tumbled as much as 61% from its 52-week high.