Russia and Ukraine News, Conflict & Sanctions: Ruble Recovers Slightly As Russians Shop in 'Record Numbers'
The ruble showed signs of recovery Wednesday after the dramatic devaluation the Russian currency had experienced in the previous two days, Reuters reported.
Vladimir Putin's government pressured exporters not to hoard foreign-currency earnings, and the country's central bank announced measures to support financial stability.
The currency gained around 9 percent against the U.S. dollar, though the market remained somewhat volatile. Central bank initiatives to proactively tackle upcoming external debt repayments by Russian firms and further stabilize the ruble, however, helped calm investors' nerves.
At 10:30 a.m. ET, the ruble was trading at 61.50 against the dollar on the Moscow Exchange; the euro was valued at 76.55 rubles. Even though Russia's central bank had hiked interest rates by 650 basis points, the country's currency had come under heavy pressure this week and fallen about 20 percent against the dollar. The situation caused concern about the stability of the overall Russian economy, which has been significantly weakened by sanctions imposed after Putin's annexation of the Ukrainian Crimea peninsula.
Worried that prices were about to skyrocket, Russian consumers, meanwhile, packed stores on Wednesday to stock up on big-ticket items, according to The Associated Press. Citizens bought everything from cars to home appliances, "in some cases in record numbers," as reported by AP.
The cost of important goods is expected to rise significantly because of the weakened currency.
"This is a very dangerous situation, we are just a few days away from a full-blown run on the banks," Vedomosti, the leading Russian business newspaper, wrote in an editorial. "If one does not calm down the currency market right now, the banking system will need robust emergency care."
Prime Minister Dmitry Medvedev announced a "package of measures" to stabilize the ruble during a meeting with executives from Russia's largest exporters.
Putin meanwhile, "failed ... to offer any big ideas to turn around the economy" in his Dec. 4 state-of-the-nation address, according to Reuters. The president is due to hold his his annual end-of-year news conference on Thursday, when he is expected to field questions on the issue.
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