‘The damage is done’: Russians face economic point of no return
Shoppers and business people express despair and disillusion as sanctions cause run on rouble
As markets opened in a panic on Monday, many Russians rushed to local cashpoints in Moscow to retrieve their savings before the damage got any worse. “It said they had dollars so I came here immediately,” said Alexei Presnyakov, 32, pointing to an app for Russia’s Tinkoff Bank, indicating he could withdraw hard currency. About 20 people were queued in line.
“Yesterday [the rate] was 80 [to the dollar]. Today it’s 100. Or 150. I just made a spontaneous decision today that I would ask [out of work] and go around until I took out all my money,” he said. “Before it was worth zero.” Within minutes, however, the word traveled down the queue:
the dollars were gone. Nearly half the queue walked off. “Who needs roubles?” one woman said sarcastically as she walked away.
From shopping malls to corporate boardrooms, Russians were trying to find their footing on Monday in what the
Kremlin described as the “altered economic reality” that the country was now facing following sanctions on Russia’s Central Bank and other key financial institutions.
The Moscow Exchange, Russia’s largest stock market, has halted trading until 5 March.
With its reserves frozen, the
Central Bank announced it would more than double its main interest rates to 20%, the highest this century, and
force major exporting companies, including large energy producers like Gazprom and Rosneft,
to sell 80% of their foreign currency revenues, effectively buying roubles
to prop up the currency rate.
Several owners of mid-sized companies said that
the invasion and subsequent isolation of Russia had made their businesses unprofitable overnight. One, the owner of an advertising services company with 100 employees, said that he was about to announce to his employees this afternoon that he is leaving the country for Armenia with his wife and two sons. His company, which handles contracts for international brands like Pepsi and automakers like Volkswagen, was booming as recently as January 2022, a record month for them. Now many of those brands were pulling out of the Russian market and his business was shrinking “immensely”.
Another business owner with hundreds of employees in the food and beverage and tourism industries felt that he was completely in the dark about the future under Vladimir Putin.
“We have no fucking clue what he will do next,” he said. “No one in the business community has a clue any more. Everyone is so depressed. I have experienced so many economic crises here, the pandemic being the latest. But there was always a reason to keep on fighting for your business,” he said. “Now, I don’t see the light at the end of the tunnel any more.
Even if peace is achieved, the damage is done. How do we reverse it?”
Oleg Deripaska, the billionaire businessman, had called for peace “as fast as possible” in a Telegram post on Sunday. On Monday, he went after the Central Bank decision to hike rates, taking aim at longtime rival Elvira Nabiullina, the head of the Central Bank.
“A hiked rate, the mandatory sale of foreign currency … this is the first test of who actually will be responsible for this banquet,” Deripaska wrote. “I really want clarifications and intelligible comments on the economic policy of the next three months.”
“We have left communism 30 years ago, we got accustomed to having a lot of comforts that are also seen in the West. All of that progress can be gone. We are no longer a member of the international community.”
https://www.theguardian.com/world/2022/ ... -no-return 
