The ruble collapsed Monday, Russians sought to withdraw their savings and a prominent tycoon urged an end to "state capitalism" in Russia as the country reeled from the effects of Western sanctions over the Kremlin's invasion of Ukraine.

President Vladimir Putin raged against the West as he convened a meeting with officials including central bank chief Elvira Nabiullina and the CEO of Russia's largest lender Sberbank, German Gref, to address what the Kremlin called a new "economic reality".

"The Western community, which I called 'the empire of lies' in my speech, is trying to implement sanctions against our country," he said.

The financial turmoil came on the first working day after Western allies agreed on a new volley of financial sanctions, including removing some Russian banks from the SWIFT bank messaging system, and freezing central bank assets.

Billionaire Mikhail Fridman last week became the first oligarch to speak out against Putin's invasion of Ukraine and on Monday fellow tycoon Oleg Deripaska said it was time to put an end to "state capitalism" in Russia.

"It is necessary to end all this state capitalism," Deripaska said on messaging app Telegram.

"If this is a real crisis then we need real crisis managers and not fantasists with a bunch of silly presentations," said the 54-year-old.

Billionaire Oleg Tinkov also spoke out against war, saying countries should spend money on medicine and research and not hostilities, while a spokeswoman for tycoon Roman Abramovich said he had been involved in ending the Ukraine hostilities.

Ruble in freefall 

The ruble fell sharply at the start of currency trading, reaching 100.96 to the dollar, compared to 83.5 on Wednesday, the day before the invasion of Ukraine, and 113.52 to the euro, compared to 93.5 before the assault.

This fluctuation came after the ruble-based MOEX index increased the upper trading limit.

The ruble later rallied slightly to 98.6 to the dollar and 108.7 to the euro.

Russia's central bank announced that it would not open trading in stocks at the Moscow Exchange on Monday "due to the situation that has arisen". 

It said it would make an announcement about trading for the next day by Tuesday morning.

Anti-war protesters hold up placards during a demonstration in Rome. Photo: AFP

The Kremlin acknowledged the impact, with spokesman Dmitry Peskov saying that "the Western sanctions are hard, but our country has the necessary potential to compensate the damage."

The ruble had already fallen sharply against the main world currencies due to the erupting conflict.

Many Russians queued at ATMs over the weekend, seeking to withdraw ruble savings and exchange them for foreign currency before rates plunged further.

In the second-largest city of Saint Petersburg, some 20 customers waiting outside a branch of Raiffeisen Bank Russia said they wanted to withdraw their cash.

'No trust in banks'

"We went through all these cataclysms in 1998, so we have no trust in the authorities or in banks," said Anton Zakharov, 45.

He drew a parallel between the current situation and Russia's financial crisis in August 1998, when the government defaulted on domestic debt and the ruble was devalued.

"It's safer to keep it at home: we've no idea what will happen now," added Svetlana Paramonova, 58.

The Russian central bank on Monday took emergency measures to prop up the economy, hiking the key interest rate to 20 per cent from 9.5 per cent to "support financial and price stability and protect citizens' savings from depreciation". 

This took the interest rate to a historic high.

The Bank of Russia also banned brokers from selling securities on behalf of foreign clients.

As part of a flurry of measures, the finance ministry announced that Russian resident companies that earn income from exports from Monday will have to sell 80 per cent of their foreign currency earnings.

"The ratcheting up of Western sanctions over the weekend has left Russian banks on the edge of crisis," said Capital Economics.

Alexei Vedev, a financial analyst at Moscow's Gaidar Institute for Economic Policy, praised the central bank for "acting rationally" to reduce uncertainty.

"The introduction of restrictions by the central bank, the finance ministry and the Moscow stock exchange lowers volatility," he told AFP.

He added that the Russian financial system will change due to sanctions, in a way that will "become clear later, when the geopolitical situation becomes clear".