Russia should expect a price hike that will limit the opportunities during vacations and much more, says Galina Lapushinskaya, PhD.
The absence of agreements between OPEC+ countries and the subsequent declaration of “oil price war” by Saudi Arabia provoked the strongest fluctuations of stock exchanges in the world. They caused a serious drop in oil prices and, accordingly, the rate of Russian currency.
Many Russians still remember the events of 2014, when the ruble began declining from 55 rubles to the dollar towards 65 rubles. In those days, people observed a total increase in prices for real estate, electronic devices, household appliances and other imported goods into the territory of the Russian Federation. The holders of mortgage loans denominated in foreign currency realized with a shock what a difficult time awaits them. Among other things, much agitation was observed at currency exchange offices, where people rushed to exchange their well-earned rubles into dollars.
What should we expect today? Similar events are beginning to recur in many ways. For example, currency exchange offices again boast numerous queues. In addition, coronavirus, which managed to penetrate into the territory of Russia and causes panic during this already difficult time, aggravates the problem.
Many experts promise the Russians rather difficult times.
Prices to Rise
For example, Galina Lapushinskaya, Candidate of economic sciences (PhD), said in an interview with Argumenty i Fakty weekly that Russia should expect a hike in prices, limiting opportunities during vacations and much more.
“Certainly, the situation associated with the collapse of the ruble is tricky,” said Lapushinskaya. “First of all, our vacations are at risk. Coronavirus has significantly limited the geography of tourism. At the same time, the currency exchange rate has made available destinations quite expensive.
Obviously, the costs of imported goods are about to start growing. There are plenty of them in stores. Prices will rise. For example, for all electronic devices. By the way, Russian manufacturers have a chance to prove their competitiveness in this market sector. The main thing is that they will not act under the principle “in the kingdom of the blind the one-eyed is a king.”
Actually, today much depends on the authorities -- what actions exactly they are planning to take in order to normalize the situation. It is well-known that the oil prices and the dollar exchange rate have a great influence on budgeting. We will see soon how the country is going to compensate its losses.”
She added that people should stay calm in this situation and not run to the currency exchange offices to buy dollars.
“There is no need for people to react to fluctuations,” said Lapushinskaya. “Banks will be the first to profit off this hype. In terms of saving money this opportunity will unlikely bring benefits because the government may start actions to stabilize the situation at any time. For those who buy currency, this may turn into a disadvantage. We have to keep calm. This is the most important thing.”