Russia’s benchmark MOEX index is trading at a level not seen in more than 12 months.

The Russian stock market is strengthening at the expense of domestic investors, who have few options in the face of widespread sanctions.

The Russian MOEX index is up 24% this year after falling 42% in 2022.

The Moscow stock market reached its highest level in more than a year, thanks to the country’s domestic retail investors, who have little choice about where to put their money.

The benchmark MOEX Russia index on the Moscow Exchange reached 2,646.18 on Thursday, its highest level since early April 2022.

The Kremlin has banned most foreign investors from withdrawing their investments in Russia and limited the amount of money Russians can keep in foreign bank accounts.

The MOEX index is up 24% this year, a stunning reversal from 2022, when the index fell 50% on 24 February 2022, following Russia’s invasion of Ukraine, wiping out $259 billion in market value. In 2022, the MOEX index is down 42%.

While the MOEX index fluctuated last year, prices began to rise decisively from mid-March, helped in part by the US dollar’s appreciation against the rouble, which, in turn, increased the attractiveness of investments in roubles. This year, the dollar has appreciated by 9% against the rouble.

Despite the sharp rise in the MOEX index, trading volumes in the equity market are down 41% year-on-year on the back of sanctions. The index is unlikely to reach its all-time high of nearly 4,300 in October 2021 as foreign investors are not allowed into the market.

Russia’s economy shrank by 2.1% in 2022, according to Rosstat, the country’s official statistics service. However, the country’s economy is likely to be worse than Moscow claims, as massive spending masks a slowdown in the private sector.

The MOEX ended at 2,634.96 on Friday. The bourse is closed on Monday due to a public holiday.