'Unsettled' Moscow residents tighten belts as ruble tanks

 "Unbalanced" residents of Moscow are tightening their belts like ruble tanks

Retired businessman Igor Inkin is about to turn down simple pleasures for dessert in central Moscow as the value of the ruble in his pocket continues to dwindle.At 63, he has seen the highs and lows of Russia's turbulent economy, but 17 months after the Kremlin's offensive in Ukraine, Inkin worries about how to make ends meet.The ruble has traded around 97 against the dollar in recent days - its lowest level since March 2022, weeks after Moscow unleashed all-out hostilities in Ukraine."Prices in shops are going up and we have to adjust our spending. It's very worrying," Inkin told AFP.

“We deny ourselves many, many things…sweets and so on.

Coupled with a year and a half of unprecedented Western sanctions and a sharp drop in oil revenues, the Russians are beginning to feel the pinch.Inflation has been on the rise since the spring, prompting the central bank to raise its key rate to a more than expected 8.5 percent to keep prices in check.

"The situation with the ruble is especially worrying for us pensioners," Inkin said.For young Russians now facing the kind of isolation their Soviet peers remember, the outlook is bleak.President Vladimir Putin insists Moscow will weather the storm, presenting it as a historic opportunity to boost Russian domestic businesses and create jobs for the country's youth.

Many Muscovites echoed Putin's hope that isolation from the West would lead to a renaissance of Russian companies and businesses.But far from what is shown on Kremlin-controlled television screens, many are struggling.Dmitry Bobrov, a 19-year-old freelance IT repairman and bicycle courier, can't always afford spare computer parts.

"Vidzo cards, processors... after the fall of the ruble, their prices went up a lot," he said, weighed down by a large courier bag.Western sanctions have made it difficult for Russian businesses to buy goods and parts from abroad, forcing them to rely on parallel imports - goods transported through another country.

The United Kingdom on Tuesday imposed new sanctions targeting Russia's access to military equipment, adding to a long list of restrictions aimed at isolating the country."I think the special military operation also has a big impact," Bobrov said, using the Kremlin's term for the offensive in Ukraine.

Billboards of Western brands have largely disappeared around him, replaced by huge portraits of Russian soldiers.While many Russians appear publicly stoic and receptive to the Kremlin's narrative, the data show they are increasingly worried about their livelihoods.Fearing for their savings, Russians withdrew one billion rubles ($10.3 million) in cash in the three days after the Wagner mercenary group staged a mutiny, according to central bank data.

This figure is about five times higher than the average of a normal three-day period in Russia.Sofya Donets, chief economist for Russia at Renaissance Capital, said the weakening of the ruble does not pose any risk to the country's financial stability.Analyst Arnaud Dubien, meanwhile, said the drop in the ruble was expected, reflecting the country's foreign trade.

What is not expected, he said, is that "the ruble weakens, even as the price of oil rises again." The Russian economy is heavily dependent on oil and gas exports.He warned that the government must be careful that the ruble does not slip past $100 to 1 ruble."This could fuel speculation in society that the country has fallen by the wayside," he added.Fyodor Tikhonov, a 37-year-old film industry worker, said putting food on the table for his family is much more expensive.Previously, he could buy dinner at a supermarket for about 1,000 rubles ($10)."It's at least 2,000 now," the video editor said as he took his son into the store.

The economic landscape of Moscow has taken an unexpected turn as the ruble faces a significant decline, leaving residents grappling with financial uncertainty. In this article, we delve into the challenges faced by 'unsettled' Moscow residents as they tighten their belts and strategize amidst the ruble's devaluation. From budget adjustments to lifestyle changes, let's explore how individuals are adapting to this evolving economic scenario.

Understanding the Ruble Depreciation

The recent depreciation of the ruble has sent shockwaves through Moscow's financial framework. This currency devaluation is primarily attributed to a complex interplay of global economic factors, including fluctuating oil prices, geopolitical tensions, and market dynamics. As the ruble's value decreases against other major currencies, the local cost of living rises, impacting residents' purchasing power and financial stability

Tightening Belts and Reassessing Budgets:

In response to the ruble's downturn, Moscow residents find themselves at a crossroads, forced to tighten their belts and reevaluate their budgets. Essential expenses such as housing, groceries, and utilities are on the rise, necessitating a strategic approach to financial management. Families are reconsidering discretionary spending and adopting a more frugal approach to cope with increased living costs.

Adapting Lifestyle Choices:

The ruble's depreciation has prompted a shift in lifestyle choices for Moscow's residents. With the local economy facing uncertainties, luxury purchases and extravagant outings are taking a back seat. Instead, individuals are seeking cost-effective alternatives for entertainment and leisure activities. Parks, museums, and community events are gaining popularity, allowing residents to enjoy their city without straining their wallets.

Exploring New Avenues of Income:

As the ruble's value dwindles, 'unsettled' Moscow residents are exploring innovative avenues of income to bolster their financial stability. Freelancing, remote work, and side gigs are becoming appealing options for supplementing primary incomes. The digital age has enabled individuals to tap into the global job market, providing a buffer against the economic challenges posed by the ruble's depreciation

Prioritizing Financial Literacy:

The ruble's devaluation has underscored the importance of financial literacy among Moscow residents. Understanding investment opportunities, saving strategies, and prudent spending habits are becoming essential tools for navigating the evolving economic landscape. Workshops, seminars, and online resources on financial management are witnessing increased participation, empowering individuals to make informed decisions about their financial future.

Building Resilience Through Community:

In the face of economic uncertainty, Moscow residents are recognizing the strength of community support. Sharing money-saving tips, resourceful hacks, and emotional solidarity are fostering a sense of togetherness among neighbors. Social networks and online forums are emerging as valuable platforms for exchanging insights and strategies to thrive despite the ruble's challenges.

The ruble's decline has undoubtedly cast a shadow of uncertainty over Moscow's residents, yet it has also ignited a spirit of resilience and adaptation. Through prudent budgeting, lifestyle adjustments, diversification of income sources, and a commitment to financial education, 'unsettled' Moscow residents are navigating these economic challenges with tenacity. As the ruble's value continues to fluctuate, their ability to adapt and evolve will be  to securing their financial well-being in the long run.