Russia economic crisis: Run on shops as ruble falls

Russians fear imported goods such as appliances will become more expensive. Photo / AP

Currency’s dramatic wobbles spark fears of price rises and mass buying of goods

Muscovites rushed to the shops yesterday as the ruble's slide brought fears that imported goods would soon soar in price.

As President Vladimir Putin prepared to project Russia's strength in his annual meeting with the press today, the mood on the streets was decidedly more pragmatic.

An electronics store in northeast Moscow was doing a brisk trade. Dmitry, a man in his 40s who refused to give his surname, saying he had a "secret job", was clutching a television worth 6500 rubles ($140). "Oh, that's nothing, I'm taking a fridge for 40,000 as well," he said.

"I was planning on buying anyway but I decided to do it quickly before the prices go up any more."

Nikolai, 54, an intensive care physician and former soldier, said: "All my savings are in rubles, I didn't buy any dollars earlier because that would only have played into the hands of our American enemies. Now I want to renew my computer. The falling ruble jolted me into doing it. I noticed prices on imports going up."

The ruble, already plummeting for several weeks, took a huge tumble on Wednesday, reaching a record low of 79 to the dollar. Yesterday it yo-yoed but was up at 60 by evening - still half the value at the start of the year.

Alexei Moiseyev, the deputy Finance Minister, said Russia would sell foreign currency "as much as necessary and as long as necessary" to prop up the ruble.

The crisis - linked to sanctions on Russia over its involvement in the Ukrainian conflict - appears to have had little impact on Putin.

A Kremlin-linked polling agency said yesterday that he was Russians' Man of the Year for the 15th consecutive time - and state television aired a tub-thumping trailer for his meeting with the media.

The clip saw Putin making patriotic statements mixed with images of firing tanks and rockets, triumphant Olympians and flaming ruins in eastern Ukraine.

Talking of Russia's future in one clip, Putin said: "The bear never asks permission from anyone; he will never give up his forest to anyone."

However, Russians rushed to withdraw cash and convert it into hard currency, or to buy up durable goods such as cars and large household items that might hold their value. Apple closed its online store in Russia because the ruble's value was too volatile for it to set prices.

At the electronics store, Nikolai cast his eye over a Chinese computer for 37,990 rubles.

"It's only our fault that we don't produce our own stuff like this and our economy relies so much on oil and gas. But these sanctions against us don't help. The US and those who follow it want to squeeze Russia and surround her and order us around."

Meanwhile, Ukraine's pro-European leaders and Kremlin-backed rebels have agreed to hold long-delayed peace talks.

Monday's meeting in Minsk was announced hours after German Chancellor Angela Merkel placed a late-night call to Putin.

Roman Abramovich
• Chelsea FC owner.
• Thought to have lost $1.6 billion over the past year.
• Overall fortune $16 billion.

Alisher Usmanov
• Shareholder in Arsenal FC and owns estate in Surrey.
• Owns more than 20 per cent of Russia's second-largest mobile phone operator.
• Has lost his title as Russia's richest person.
• His fortune has dipped by 58 per cent, or $8.6 billion.

Oleg Deripaska
• Holds 48 per cent stake in Rusal, world's largest aluminium producer.
• Has increased his net worth by $2 billion over the past year.
• Worth $10 billion.

- Telegraph Group Ltd, AFP