08/27/1998 17:31:34 Rouble, in free fall, loses its meaning
By Peter Graff
MOSCOW, Aug 27 (Reuters) - "We're not selling, but you can
order," said the saleswoman at the furniture shop. "Next week,
maybe, we can tell you what it will cost."
Russia's rouble is not merely falling. It has, in a certain
sense, ceased to exist as a way to measure value.
For the second day in a row on Thursday, Russia's central
bank called off currency trading without setting any rate
whatsoever against the U.S. dollar, leaving the entire economy
in an odd sort of limbo.
There are far more dollars than roubles in circulation in
Russia, but only roubles can be used in shops. The daily
rouble-dollar fix has been described as the economy's lingerie:
you can't always see it, but you know it's there, hidden in
prices for everything from milk and bread to BMW cars.
Street merchants get it beeped in on their pagers. It is
flashed up on the morning news. And most of all, it is posted on
exchange booths on street corners.
Even at the peak of Russia's post-Soviet inflation in the
early 1990s, people were constantly aware of the rate, often
changing prices several times a day.
But now, with the rouble again in free fall, the rate is not
merely lower, it is simply not there: suspended, along with
trading on the interbank exchange.
That has left anyone with an inventory to sell, from the
lowliest cigarette peddler to the flashiest importer of luxury
cars, at a loss as to just what their goods are supposed to
For the second day running, the ubiquitous exchange booths
all across the land have simply stopped offering dollars for
sale at any price. On Moscow's streets people speak in hushed
tones of black marketeers selling greenbacks for 15 roubles to
the dollar, up from about 6.2 earlier this month.
Many shops, forbidden to take dollars but afraid to take
roubles whose actual worth is now anybody's guess, have simply
closed, putting up signs reading "technical break".
Other shops were using the rouble's fall as a way to clear
inventory. At a shop selling in-line roller skates a saleswoman
said they had not bothered to mark up the price in roubles.
Foreign firms, which may quote prices in dollars but must
accept payment only in roubles, seemed to be picking their
prices out of the air.
One athletic club said it was using a rate of 13 roubles to
the dollar on membership fees; another said it was using 9.5,
but hinted the price might go up.
"You'll probably want to hurry up and buy a membership now.
Either that or wait awhile," the saleswoman said.
A local mail forwarder said it was using 12 roubles to the
dollar. Federal Express was delivering for nine.
Stockman's, the Finnish retailer, announced it was raising
prices at grocery shops, but has not said by how much.
At Moscow's Kiev railway station wholesale market, where
street peddlers stock up on cigarettes and sweets, prices have
usually mirrored the daily exchange rate almost perfectly. On
Wednesday most stalls were shut.
The few that were open were charging about 30 percent more
than last week and running down their inventory. But the price
hikes were already enough to cause worry among their clients,
mainly retired women who stand in metro stations selling
cigarettes for extra cash.
"They will kill us. It's that simple," said one woman who
did not give her name. "Winston for six. I've been selling them
for 5.50 and here they are already six. They will kill us all."
As if the current situation were not confusing enough,
Russia's central bank said on Thursday it was suspending
Friday's trading in advance, which meant there would be no new
rate until next week at the earliest.
In the meantime, at the furniture store, a couple was busy
looking through plans for a new customised kitchen.
The saleswoman in hushed tones quoted prices in "virtual
units", a euphemism used for dollars during the days of
hyperinflation. The couple would be expected to pay cash in
roubles when the rate becomes clear.
"Don't worry. We'll work something out," she said.