Many Australian currency traders have all but stopped trading in the Russian rouble as demand for the struggling currency dries up in the face of worries that it is likely to depreciate further and market liquidity won't be there to match orders.
OzForex treasury manager William Shepard said there is not usually a lot of trading in roubles in Australia because Russia is not one of our big export partners, and because of complications with the way trades can be settled.
"We are still trading spot trades. We only allow clients to buy rouble from us, rather than sell. The majority of risk lies in taking orders, because the risk is the client wants a certain rate and they can't match it.
"We don't have an underlying rouble position so we are not exposed," he said, adding that OzForex has not done a rouble spot trade for over a week on December 11 this year.
The rouble fell up to 25 per cent overnight on Tuesday despite Moscow's efforts to push it higher by the raising of official interest rates to 17 per cent, from 10.5 per cent, overnight.
The currency has since recovered and is down about 15 per cent against the greenback. The US dollar-rouble is the 10th most heavily traded currency pair globally, according to Bank of International Settlements data.
Russia's economy has been struggling for much of this year as a result of international sanctions imposed after the Ukraine conflict and under the weight of lower oil prices. Russia is one of the world's biggest energy exporters.
Westpac Banking Group and Commonwealth Bank of Australia are not big traders of the rouble because there is simply not the customer demand in Australia.
But it is a different story among European forex trading platforms, many of which including FXCM have suspended trading of rouble amid growing signs of stress among the banks that underpin trade in the battered Russian currency.
Most Western banks have stopped pricing the US dollar-rouble cross. Indeed, big corporations such as technology and software behemoth Apple are now refusing to accept online payment for sales in roubles.
FXCM said it can no longer offer this instrument to clients and began closing any existing client trades in USD/RUB overnight.
"While the timing of such crises is never certain and always catches investors by surprise to some extent, the devolution of the Russian economic situation toward where we find ourselves at present is something I've seen as a significant possibility since the beginning of the year. In hindsight, the tipping point making a crisis imminent occurred in July after the Malaysia Airlines flight MH17 incident and the subsequent expansion of sanctions," FXCM currency strategist Ilya Spivak said.
The fallout from the Russian currency crisis is likely to rattle investor confidence but the net impact on Australia could well be neutral as an even weaker currency offsets an expected drop in demand for national exports from emerging markets.
"The Russian currency crisis is going to lead to a flight to safety," Mr Shepard said.
"If the Russian crisis takes hold and we see further falls in the rouble that would normally be US dollar positive and Aussie dollar negative.
"Russia is not a large trading partner of Australia. There is potential for this to spill into emerging markets which, through a knock-on effect, could impact on Australian export volumes.
"That will, however, be offset by a weaker Australian dollar so the effect could well be neutral," he said.
Westpac senior currency strategist Sean Callow warned that as investors continue to scramble and ditch Russian rouble denominated assets, this could weigh on investor confidence globally.
"Australia does not have significant direct trade with Russia and low oil prices are a net positive for Australia's economy, partly as they help our key trading partners even more [Asia is a huge net importer of oil]. But capital flows are the near-term danger.
"There have been unusually sharp movements in developed-market currencies such as the Norwegian krone – weaker – and the Japanese yen – stronger. A sudden rise in the Japanese yen is usually a worrying sign for global investor confidence and therefore a warning sign for Australia too.
"It's certainly a major development for global markets, which means Australia will be impacted to some degree. We saw a rise in the euro and inflows to German bonds [bunds] overnight, suggesting capital flight from Russia. The longer oil prices stay low, the deeper the looming recession in Russia, the greater the pressure on Putin so there are potentially geopolitical implications too," Mr Callow said.