The memories of the crisis of the nineties have returned this Monday to the memory of some Russians.
Echoes of the collapse of the ruble in 1998 that cemented the subsequent power of Vladimir Putin, considered by many to be the guarantor of national stability.
Now, the sanctions imposed by the West for the invasion of Ukraine have once again shaken the foundations of the country's economy, where ATMs have run out of money and some sellers have raised their prices more than 30% in anticipation of a future bleak economic.
“We find that all our distribution activities are losing money.
Yes, prices have gone up 30% and we can't say there won't be more increases," Dmitri Alekseyev, director of the popular technology retail chain DNS, posted on Facebook.
“We find ourselves in a new world where, in addition to the increase in the exchange rate, technological sanctions have been introduced and it is still not clear how many products will be delivered”, explained the businessman, who understood that “these prices are annoying”, but “ it is the reality” that he has had to live.
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The Russian invasion of Ukraine, live
Meanwhile, on the street, many ATMs have run out of money due to the fear that the cards will not work after the disconnection of several banks from the SWIFT payment platform.
At the moment, transfers abroad do not work, unfortunately for many expatriates who have lived in Russia for years, and for many Russians who now live abroad and who, due to studies or another situation, still depended on their savings in rubles.
“I see it quite black.
At the moment the blocking of the SWIFT platform does not apply to energy purchases, but it can seriously affect conventional commercial transactions, which are the majority of those carried out by Spain in its exports to Russia”, says Rubén de Pedro, director of the Rusbáltika company and technical director of the Extenda office in Russia.
The impact of inflation on purchasing power will reveal itself little by little this month.
The average Russian salary was 54,649 rubles a month in October 2021, according to the Rosstat statistics agency.
With the January exchange rate (85 rubles per euro), this would be just over 640 euros per month.
With the change to 110 rubles, as it fluctuated this Monday, the salary decreases to 496 euros.
As for pensions, Vladimir Putin signed a law in January to index retirees' payrolls to inflation.
After its last review, the average pension was 18,984 rubles, 233 euros a month before the war, and just over 170 on the first day of sanctions.
A sector on which many older people depend is the pharmacist.
The president of the Monastyriov holding company also announced that the prices of all medicines not regulated by the State will rise "because they are imported in dollars and euros."
"We cannot say what percentage they will rise, it has been a short time yet to have data," Alexander Monastyriov explained on his website.
The central bank has raised interest rates in one fell swoop from 9.5% to 20% on Monday, its highest rate in the history of the Russian Federation.
Before the chaos, the regulator's inflation target was 4%, the level that rates were almost at at the end of 2020, but Russia was no stranger to global inflation that began last year due to demand during the pandemic and, after countless gradual increases in rates, they reached 9.5%, while official inflation stood at 8.73% in December.
Technology has been one of the first sectors to raise prices this Monday.
An example is Apple, very popular in Russia, with 27.5% of the mobile market, according to data from Statista.
Just before the war started, the 128-gigabyte iPhone 13 cost 79,990 rubles in the official store.
After knowing the sanctions, its price has risen to 99,000 rubles in Apple distributors (23% more), while on the DNS website it has risen to 103,999 rubles (30% more).
Access to new mortgages will be much more difficult.
Before knowing the decision of the central bank, the sanctioned entity VTB, the second largest entity in the country, raised its rates from 11.3% to 15.3%.
This has been his second review in a week.
Two days before the invasion it had already raised it by one percentage point due to tensions.
Other banks have also begun to raise their interest rates and, in some cases, have even chosen to deny loans until this bleak picture is cleared up.
The demands on NATO and the threat of the 150,000 soldiers surrounding Ukraine, according to US intelligence sources, had already hit the ruble in recent months, and this had a certain influence on the granting of mortgages in January, when a 13 % less housing loans than in the same month of 2021. The new reality will hit the sector even harder.
At the moment, the current owners should not fear, since mortgages are generally granted at a fixed rate to families, although in the case of companies the risk is much greater because they usually sign variable rates.
The first entity in the country, the also sanctioned Sberbank, has asked for calm.
"No modification will be made to existing mortgage and consumer loans," he assured through his Telegram channel.
Queue to withdraw money from an ATM in St. Petersburg, this Sunday.
ANTON VAGANOV (REUTERS)
On the other hand, the specialized portal Autonews has verified that 20 car companies have raised their prices for the third time so far this month, and the Russian AvtoVAZ, manufacturer of the Lada, has announced a revision of its prices this March 1 without define its scope.
According to media data, national cars became more expensive last year by 8%, while foreigners did so by 20%.
The shopping basket tends to experience changes more slowly, and changes are likely to be felt over weeks or months.
Food was the first sector in which the Russian government promoted its great plans to substitute imports for national products.
He started the program in 2014, when sanctions began hitting Russia after it annexed Ukraine's Crimean peninsula.
Despite food independence, the lack of competition between vendors has caused food inflation to exceed 11.1% in January.
Now, with the ruble devalued, it could be even worse.
Days before announcing the invasion, Putin told his Belarusian counterpart, Aleksandr Lukashenko, that he had successfully completed the plan so as not to depend on imports from abroad: "We did not do everything we planned, but in general it can be said that more than We have completed 90% of the tasks we set ourselves.”
This Sunday, when he activated his strategic containment forces, Putin denounced that Western sanctions were "illegitimate measures."
There are also no lines at exchange houses, where businesses buy euros and dollars at pre-war prices but no longer sell foreign currency due to the ruble's fluctuation.
“It is already too late for the population to buy foreign currency,” says Anton Prokudin, a macroeconomics analyst at the Ingosstraj-Investitsi investment fund.
“If exports don't decline significantly, as they would with a real embargo, then the exchange rate could recover.
If they fall, the exchange rate will rise to about 150 rubles per dollar (almost 170 per euro) in 2024 ″, he adds.
"A return of 20% over a two-year horizon makes it pointless to buy dollars above 100 rubles," adds the expert, who believes that Russians should focus on investing in real assets, such as real estate and stocks.
"But it's important to be selective now because some companies will be hit hard by the sanctions."
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