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There were reports (hard to verify obviously) over the weekend that places like jewelry stores were busy as people were trying to change their rubles to a hard

There were reports (hard to verify obviously) over the weekend that places like jewelry stores were busy as people were trying to change their rubles to a hard asset. Do people who live in Russia keep a lot of money in a bank and/or as rubles, or do they keep it in something like USD/EURO and convert as needed? This drop is obviously extreme, but it's not like the Russian economy was great before.

toyg 5y ago
I expect it will be like in any not-so-rich country: most people are stuck with the national currency, while middle and upper classes store their wealth in foreign currency.
- dunkelheit 5y ago
  USD savings accounts are accessible to everybody with a bank account and pretty popular. Although recently less so, because interest rates dropped to almost zero.
  - hef19898 5y ago
    A dollar account at an Russian bank doesn't help if the Russian government seizes accounts so. And witg Russian banks being partially cut of from SWIFT, those accounts might be harder to come by.
    - dunkelheit 5y ago
      Indeed. Though I think this is the measure of last resort for them. Right now they announced a very steep base rate hike and ordered exporters to sell 80% of inbound currency and these measures seem to be working - ruble rebounded from the high of 110 per USD early in the morning and is now trading at around 95-100.
- willis936 5y ago
  This is the reason oligarchs were individually sanctioned.
  - Loughla 5y ago
    Call me too cynical or jaded or whatever, but I just have zero faith that any economic sanctions cannot and will not be circumvented. What we learned from the Panama, Pandora, and Paradise papers is that wealthy individuals and corporations will find a way. Am I wrong?
    - 3D30497420 5y ago
      I'm not intimately familiar with what was in the Panama/Pandora/etc. papers, but if I recall correctly it was a lot more "run of the mill" tax evasion, exploiting loop-holes, and the like. In these cases, I'd guess governments weren't always highly incentivized (or were actively disincentivized) to deal with these sorts of actions. In the present case, where governments are highly incentivized and the sanctions are quite specifically targeted, I'd expect more of an impact. Will it be enough? I suppose we will see. One challenge I've seen is that it isn't like all these assets are just labeled with the owners' names. As a result, it make take time to actually enforce such sanctions, possibly too much time to have an immediate impact. Perhaps the threat will be enough, but, again, we'll see.
    - ta988 5y ago
      Especially since they had a lot of time to prepare. But you can't move all your wealth at once, especially if you are not sure if a big event will happen. So it is likeky that they just diversified more outside of Russia. But they will likely still loose a lot.
    - tomatotomato37 5y ago
      You are right in that ultimately wealth will be transferred, but circumvention costs resources, especially with the extreme sanctions Russia is facing. If oligarchs now have to resort to loading gold bullion on submarines bound for South America then we did a good job
    - 5y ago
HWR_14 5y ago
There were pictures going around of huge lines at ATMs, as Russians tried to withdraw the maximum allowed.
- NLMichel 5y ago
  Also interesting that average age of people in the line was about ~30, I have the feeling that a large part of the population (older people) have no idea what is going on.
  - creaturemachine 5y ago
    The older population knows exactly what's going on and already keep their savings stuffed in the mattress. The younger generations are now having to learn the hard way.
- oneoff786 5y ago
  Which was capped at… $20
  - HWR_14 5y ago
    Well, yeah. In a run on the bank situation the ability to withdraw money is going to be limited. But I was talking about widespread intent.
- dunkelheit 5y ago
  Yesterday I was at a local branch of my bank. There was a queue (~5 people), but the ATMs worked and the cash was plentiful, no unusual withdrawal limits. Photos are probably not fake, because the demand for cash is obviously there and some banks may have logistical problems with resupplying ATMs.
dunkelheit 5y ago
> There were reports (hard to verify obviously) over the weekend that places like jewelry stores were busy as people were trying to change their rubles to a hard asset. This is business as usual in a currency crunch. Already happened twice in my memory (2008, 2014) - some people would panic-buy expensive items like plasma tvs. This is not indicative of some systemic collapse.
bushbaba 5y ago
Why would jewelry stores even do the sale. I’d they do the sale then they too end up with rubles that are worthless. I guess Id they have loans they could close them? But wouldn’t it be better to wait to sell.
- jopsen 5y ago
  Maybe, maybe not.. shops are probably not engaged in currency speculation. And it's certainly possible that fest drives some people to buy crap jewelry at high prices..

toyg 5y ago

I expect it will be like in any not-so-rich country: most people are stuck with the national currency, while middle and upper classes store their wealth in foreign currency.

dunkelheit 5y ago
USD savings accounts are accessible to everybody with a bank account and pretty popular. Although recently less so, because interest rates dropped to almost zero.
- hef19898 5y ago
  A dollar account at an Russian bank doesn't help if the Russian government seizes accounts so. And witg Russian banks being partially cut of from SWIFT, those accounts might be harder to come by.
  - dunkelheit 5y ago
    Indeed. Though I think this is the measure of last resort for them. Right now they announced a very steep base rate hike and ordered exporters to sell 80% of inbound currency and these measures seem to be working - ruble rebounded from the high of 110 per USD early in the morning and is now trading at around 95-100.
willis936 5y ago
This is the reason oligarchs were individually sanctioned.
- Loughla 5y ago
  Call me too cynical or jaded or whatever, but I just have zero faith that any economic sanctions cannot and will not be circumvented. What we learned from the Panama, Pandora, and Paradise papers is that wealthy individuals and corporations will find a way. Am I wrong?
  - 3D30497420 5y ago
    I'm not intimately familiar with what was in the Panama/Pandora/etc. papers, but if I recall correctly it was a lot more "run of the mill" tax evasion, exploiting loop-holes, and the like. In these cases, I'd guess governments weren't always highly incentivized (or were actively disincentivized) to deal with these sorts of actions. In the present case, where governments are highly incentivized and the sanctions are quite specifically targeted, I'd expect more of an impact. Will it be enough? I suppose we will see. One challenge I've seen is that it isn't like all these assets are just labeled with the owners' names. As a result, it make take time to actually enforce such sanctions, possibly too much time to have an immediate impact. Perhaps the threat will be enough, but, again, we'll see.
  - ta988 5y ago
    Especially since they had a lot of time to prepare. But you can't move all your wealth at once, especially if you are not sure if a big event will happen. So it is likeky that they just diversified more outside of Russia. But they will likely still loose a lot.
  - tomatotomato37 5y ago
    You are right in that ultimately wealth will be transferred, but circumvention costs resources, especially with the extreme sanctions Russia is facing. If oligarchs now have to resort to loading gold bullion on submarines bound for South America then we did a good job
  - 5y ago

HWR_14 5y ago

There were pictures going around of huge lines at ATMs, as Russians tried to withdraw the maximum allowed.

NLMichel 5y ago
Also interesting that average age of people in the line was about ~30, I have the feeling that a large part of the population (older people) have no idea what is going on.
- creaturemachine 5y ago
  The older population knows exactly what's going on and already keep their savings stuffed in the mattress. The younger generations are now having to learn the hard way.
oneoff786 5y ago
Which was capped at… $20
- HWR_14 5y ago
  Well, yeah. In a run on the bank situation the ability to withdraw money is going to be limited. But I was talking about widespread intent.
dunkelheit 5y ago
Yesterday I was at a local branch of my bank. There was a queue (~5 people), but the ATMs worked and the cash was plentiful, no unusual withdrawal limits. Photos are probably not fake, because the demand for cash is obviously there and some banks may have logistical problems with resupplying ATMs.

dunkelheit 5y ago

> There were reports (hard to verify obviously) over the weekend that places like jewelry stores were busy as people were trying to change their rubles to a hard asset. This is business as usual in a currency crunch. Already happened twice in my memory (2008, 2014) - some people would panic-buy expensive items like plasma tvs. This is not indicative of some systemic collapse.

bushbaba 5y ago

Why would jewelry stores even do the sale. I’d they do the sale then they too end up with rubles that are worthless. I guess Id they have loans they could close them? But wouldn’t it be better to wait to sell.

jopsen 5y ago
Maybe, maybe not.. shops are probably not engaged in currency speculation. And it's certainly possible that fest drives some people to buy crap jewelry at high prices..