Ordinary Russians faced the prospect of higher prices and crimped foreign travel as Western sanctions over the invasion of Ukraine sent the ruble plummeting, leading uneasy depositors to line up at banks and ATMs on Monday in a country that has seen more than one currency disaster in the post-Soviet era. The Russian currency plunged about 30% against the US dollar after Western nations announced unprecedented moves to block some Russian banks from the SWIFT international payment system and to restrict Russia's use of its massive foreign currency reserves, the AP reports.
Russians wary that sanctions would deal a crippling blow to the economy have been flocking to banks and ATMs for days, with reports on social media of long lines and machines running out. People in some central European countries also rushed to pull money from subsidiaries of Russia’s state-owned Sberbank after the Russian parent bank was hit with international sanctions. Moscow's department of public transport warned city residents over the weekend that they might experience problems with using Apple Pay, Google Pay and Samsung Pay to pay fares because VTB, another Russian bank facing sanctions, handles card payments in Moscow's metro, buses and trams
A sharp devaluation of the ruble would mean a drop in the standard of living for the average Russian, economists and analysts said. Russians are still reliant on a multitude of imported goods, and the prices for those items are likely to skyrocket, such as iPhones and PlayStations. Foreign travel would become more expensive as their rubles buy less currency abroad. And deeper economic turmoil will come in the coming weeks if price shocks and supply chain issues cause Russian factories to shut down due to lower demand. "It’s going to ripple through their economy really fast,” says David Feldman, an economics professor at William & Mary in Virginia. "Anything that is imported is going to see the local cost in currency surge. The only way to stop it will be heavy subsidization."
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