Foreign investors also hold more than $US80 billion of Russian equities so, if the exchange does reopen to trading in shares, they also face heavy losses.

The value of the shares in Russian companies listed on foreign exchanges has been decimated since the invasion. The value of Russia’s biggest bank, Sberbank, for instance has plunged more than 96 per cent and energy giants Gazprom nearly 90 per cent and Rosneft nearly 50 per cent.

The trillions of roubles that the Bank of Russia has set aside to support its equities when trading resumes will be aided by a ban on sales by foreigners but it is inevitable that even with limited trading and probably some limits on price movements Russian investors will themselves experience significant wealth destruction.

The collapse in the value of its currency, the surge in yields on borrowing (the Bank of Russia’s benchmark interest rate is now 20 per cent) and the Western ban on investment in new Russian debt issues will throttle the Russian financial system and economy the longer the sanctions and Russia’s responses to them remain in place.

So far Russia has averted a default on its sovereign debt. It made a $US117 million interest payment on two of its dollar-denominated bonds last week, via JPMorgan (which had to ask the US Government for permission before it transferred the funds to Citigroup for distribution to the investors).

It has, however, more than $US600 million of interest payments due this month and a $US2 billion principal payment early next month (with 30-day grace periods) and investors will be anxious to see whether it makes those payments and, if so, whether it pays in dollars, euros or roubles.

Russia is paying a steep price in financial and economic terms for its decision to invade Ukraine, one that will increase over time.

Some of Russia’s debt agreements allow payment in its own, now heavily-devalued, currency. Russia has warned that the West’s sanctions might prevent it from making US dollar-denominated payments to foreign creditors and has also threatened to either make payments in roubles, even on bonds that don’t provide that payment option, or hold the payments in escrow accounts (blaming the sanctions for being unable to transfer them to the creditors) for as long as the sanctions apply.

At the very least payment in roubles where the contract requires dollars or euros would be a technical default. Missing a payment would be an actual default, the first for Russia since the Russian Revolution.

It does appear anxious not to trigger what would be one of the largest and most impactful sovereign debt defaults in modern history and one that could have a cascading effect on Russia’s state-owned and privately-owned companies. Between them the government and Russian companies have about $US150 billion of foreign currency debt, although domestic investors hold the majority of its government debt.

It has also imposed capital controls and ordered its companies with cash held in foreign exchange to repatriate most of it to try to replenish its foreign exchange reserves after the sanctions rendered more than half its $US640 billion of reserves untouchable.

Russia wants to be able to defend the rouble and pay for the goods and services it needs from the rest of the world and try to avoid the hyperinflation that could flow from the collapse in the value of its currency. Russia’s inflation rate was just under 10 per cent before the invasion but has since jumped to more than 12.5 per cent and will almost inevitably surge higher.

Russia is paying a steep price in financial and economic terms for its decision to invade Ukraine, one that will increase over time. The West isn’t, of course, immune with foreign investors facing many billions of dollars of losses on their Russian exposures, although those losses would be fairly widely distributed.

Higher oil and other commodity prices are also flowing into higher inflation rates and energy and food shortages throughout much of the world and are forcing interest rates in the developed world higher.

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On Monday the US 10-year bond yields hit 2.3 per cent, its highest level in nearly three years, as Federal Reserve Board chairman Jerome Powell indicated that the central bank would consider raising rates more aggressively than it had previously contemplated.

The real brunt of the sanctions and their impacts on Russia’s markets and economy will, however, fall on ordinary Russians, who don’t yet seem to appreciate what their country is doing in Ukraine or the full extent to which they will themselves suffer as a result.

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