In Moscow, better a BMW at hand than many rubles flying – publico

In Moscow, better a BMW at hand than many rubles flying – publico

                 

                         
                     

                         
                     

                         

                 

 
                         

The ruble shrinks, Muscovites go shopping. The environment should be panic seems festive, own the Christmas season, with the shops of shopping centers in the Russian capital to sell like there’s no tomorrow. Prices invite because, although they are rising, not yet reflected in all the sharp fall of the ruble, which makes Moscow one of the most desirable cities to buy imported goods like Gucci bags, jewelry, Apple computers, digital cameras, cars , apartments …

                     

                          The logic for many Russians who failed to exchange rubles for dollars or euros, when the Russian currency had not yet reached historic lows, is simple: why have rubles that tomorrow may not be worth anything, if I can buy a BMW to today a great price, for tomorrow the sell for a much higher value? And why not buy already today if BMW of prices tomorrow can shoot or simply fail to be more BMW to buy?

Several foreign companies have already suspended exports to Russia due to storm the Russian currency faces, which means that many stocks are going to run out. Ikea announced that as from this Thursday would increase their prices, so far unbeatable. Result: the Swedish furniture store lived days of madness earlier this week, with buyers from flooding until two in the morning. The same happened in Apple stores, which announced the suspension of its online sales to Russia.

That is why the banks also have people queue rushing to raise their savings. A branch of Sberbank, Andrei Matrosov, an engineer by profession, was a man thinking of what to do to their rubles: buy a car, an apartment or some sort of financial assets? Across the street, Galya, a middle-aged doctor, had just bought a fat gold ring and said he would continue shopping. “I think the ruble will not stop falling until the end of the year, so now I’m looking for furniture.”

“He could not exchange your money when a dollar was worth 35 or 40 rubles already only is thinking of ways to quickly spend your money on luxury goods before it happens a huge price increase, “he told Financial Times Viacheslav Trapeznikov, director of the Builders Association of the Urals. But warns: “This trend has a shelf life.” Either because prices will inevitably align with the ruble diving, either because the rise in interest rates will have an impact on consumption, and the negative effect that comes with feeling of uncertainty about the future. After the party atmosphere, it is expected the hangover.

In a year, 50% less value
Earlier this week, the ruble depreciated strongly and, on Wednesday, before the opening of the market, again lost ground compared to the US dollar and the euro. With the ruble in free fall, the Russian Ministry of Finance is using all the weapons you have at your disposal to try to hold the national currency and avoid days like Tuesday, when the Russian currency reached back 20% over the dollar and the euro.

On Wednesday, Svetlana Nikitina, a spokeswoman for the ministry, said that the ruble is “extremely undervalued” and, therefore, the government began selling exchange on the market to try to avoid a similar scenario to 1998, when the currency collapsed and the country defaulted. It was early the volume or type of assets that are being sold.

With the currency crisis, European stock markets opened the day “in the red”, with London, Paris, Milan and Frankfurt to fall about 1%. The devaluation of impact of currency are already also affect investments worldwide. According to Blooomberg, Pacific Investment Management, for example, faces considerable losses in Russian bonds it holds.

On Monday, the Central Bank of Russia in 2000 disbursed millions of dollars to try to stabilize the currency . The next day, increased to 10.5% benchmark interest rate to 17%, considering the situation “critical”.

In the year, the ruble devalued by 50% as a result of a political and economic context troubled. The economic and financial sanctions of the West in response to the occupation of the Crimea and the conflict in Ukraine explain the fall of the currency as slippage in oil prices, raw material worth 40% of the revenues of the Russian state.