Wednesday, December 17, 2014

PUTINomics: The Weak Ruble Keeps Russians At Home

Viktor Lander, a 35-year-old copywriter, usually heads to Europe with his wife for the New Year holidays. This winter, with his rubles buying fewer than two-thirds as many euros as they did 12 months ago, they are staying home in Moscow.
“When the rate started to rise rapidly at the start of October, we just stopped even thinking about going anywhere,” Mr. Lander said.
Ice skaters during the annual Christmas fair on Red Square 
in Moscow on Dec. 8. More Russians are choosing domestic 
destinations for holiday vacations because of the weak ruble. 
Agence France-Presse/Getty Images
The ruble’s plunge against the euro and the dollar is upending the lives of many in Russia’s middle class, which in recent years has gotten used to vacations abroad and Western products from gadgets to food.
Booming oil prices helped Russia’s middle class grow to 60% of the population in 2010 from 30% a decade earlier, according to the World Bank.
People who have taken out foreign-currency mortgages 
protested the ruble’s slide outside the offices of Russia’s 
central bank Friday. Zuma Press
Now, the plunging oil price and sanctions imposed on Russia by the West because of its intervention in Ukraine have sent the ruble plummeting, leaving many of those who at one time could afford the latest smartphones, furniture from IKEA and cheese from France facing a new reality.
A mid-November survey by the FOM pollster found 45% of Russians say the weak ruble has had a significant impact on their lives. The ruble has slipped further since the survey, touching record lows of nearly 58 to the dollar on Friday compared with just over 32 at the start of the year.
Read the rest of the story HERE.

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