As the Ruble Crashes, Gallows Humor and Panic Shopping

Outside a currency exchange bureau in Ekaterinburg, Russia, on Dec. 16 Photographer: Vladislav Lonshakov/Kommersant Photo via Getty Images

For several weeks, Russians were receiving news about the fall of their national currency with a serenity bordering on nonchalance. This attitude was best illustrated by the website zenrus.ru, which showed constantly updated dollar/euro rates and the falling oil price against the backdrop of ocean waves and to the sound of soothing, meditative music. But this humorous attitude gave way to outright panic on Monday, as the ruble plunged to levels that the business daily RBK described as “far beyond the worst-case scenario.”

“Happy 1999!” read RBK’s front-page headline on Tuesday morning. It was a reference to the year of the worst economic crisis Russia has endured since the collapse of the USSR. In an opinion piece run by RBK, Oleg Kuzmin of Renaissance Capital said the collapse was precipitated by falling oil prices complemented by Western sanctions punishing Russia for its intervention in Ukraine. Barred from new Western credits, major Russian banks have to pay old debts from their own resources. December is one of the payment peaks—the banks need to return $20 billion this month, Kuzmin notes. Another $75 billion is to be paid next year.

“100 rubles per dollar is no longer a fantasy,” proclaimed the front page of the Kremlin-friendly Nezavisimaya Gazeta, also released on Tuesday morning. Most experts quoted by the newspaper, however, appeared to consider such forecasts overly pessimistic. As the day progressed, it became apparent that they might need to think again.

A few hours after Tuesday newspapers went into print, Russia’s central bank announced a major interest rate hike, raising it to 17 percent from 10.5 percent. This initially resulted in the ruble regaining some ground, but a few hours later it started falling again—from about 60 per dollar to 76, while the euro rate was hovering in dangerous proximity to 100 rubles per euro.

In an article published on the liberal website slon.ru, columnist Alexey Mikhaylov argued that the Central Bank’s move had been doomed from the outset. “It was not [driven by] confusion, or scare, or panic—it was the cold resolve of someone committing a suicide,” Mikhaylov wrote, proposing that the bank fell victim to political pressure.

Like many other liberal authors, he linked the catastrophic slump on Friday to the murky deal in which the country’s flagship company Rosneft issued bonds worth 625 billion rubles ($10.8 billion on the date of Mikhaylov’s column), which were immediately acquired by state-owned banks. “The Central Bank has essentially given 625 billion rubles to Rosneft, and in all likelihood it was this money, which caused the collapse on Monday—no matter what the company says,” wrote Mikhaylov.

RBK offered the same explanation. “It feels like the rubles obtained in [the] Rosneft deal have gone to the currency exchange,” said Metallinvestbank expert Sergey Romanchuk, according to the newspaper. Rosneft denied it had exchanged the rubles for hard currency, RBK notes.

Similar accusations have been pouring on Rosneft from all quarters. It prompted company spokesman Mikhail Leontyev to go on RSN radio and blame the central bank management for the ruble’s disastrous performance. “The central bank has shot the Russian economy dead so it doesn’t suffer,” he said. His boss and Vladimir Putin’s close associate Igor Sechin later blamed opposition leaders, such as Alexei Navalny, for what he described as “an act of provocation.”

The term “Black Tuesday” dominated evening headlines. The pro-Kremlin NTV channel led its report about the collapse with: “Black Monday was followed by the blackest of Tuesdays.” Social networks were full of posts showing disdain for the authorities and half-humorous discussions about life without the perks middle-class Russians got used to in Putin’s years, such as holidays abroad and deli food. Many commentators were especially annoyed that the discrepancy between the ruble and other currencies means Russians are essentially barred from traveling outside the country. “So now we are under a travel ban. … They didn’t even need to introduce exit visas [like the ones people needed in Soviet times] or build an iron curtain,” Boris Yunanov, the deputy editor of the liberal New Times magazine, wrote on Facebook.

Blogging journalist Ilya Klishin, who was involved in Moscow protests two years ago, wrote that discussions about the possibility of fresh protests were under way, but the government made it difficult to revive the movement: “Leaders are in prison, or under house arrests or in exile. Others are afraid of prosecution. So what do you think should happen—some ordinary person who’s had enough will come forward to appoint the date and time?”

On Twitter, activists have coined the hashtag #euromanezhka, which marries the name of Moscow’s Manezhnaya Square, near the Kremlin, with Kiev’s Euromaidan protest, which led to the toppling of President Viktor Yanukovich earlier this year. “There is always a way out,” posted @nerezinovka, accompanying the tweet with the hashtag and a picture of car tires standing next to a Moët Champagne bottle turned into a Molotov cocktail:

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