MOSCOW — Russian consumers flocked to the stores Wednesday, frantically buying a range of big-ticket items to pre-empt the price rises kicked off by the staggering fall in the value of the ruble in recent days.
As the government considered ways to ease the selling pressure on the ruble, which has slid 15 percent in just two days and raised fears of a bank run, many Russians were buying cars and home appliances — in some cases in record numbers — before prices for these imported goods shoot higher.
The Swedish furniture giant IKEA already warned Russian consumers that its prices will rise Thursday, which resulted in weekend-like crowds at a Moscow store on a Wednesday afternoon.
Shops selling a broad range of items were reporting record sales — some have even suspended operations, unsure of how far down the ruble will sink. Apple, for one, has halted all online sales in Russia.
"This is a very dangerous situation, we are just a few days away from a full-blown run on the banks," Russia's leading business daily Vedomosti wrote in an editorial Wednesday. "If one does not calm down the currency market right now, the banking system will need robust emergency care."
Alyona Korsuntseva, a consumer in her 30s, says the current jitters surrounding the Russian economy reminded her of the 1998 Russian crisis when the ruble tumbled following the government's default on sovereign bonds.
"What's pressuring us is the fact that many people (back then) rushed to withdraw money from bank cards, accounts," she says. "We want to safeguard ourselves so that things wouldn't be as bad they were back then."
Consumers are buying durable goods because Russian stocks are too volatile as an investment and an overwhelming majority of Russians cannot afford to buy land or real estate.
The ruble has suffered catastrophic losses this week as traders fretted over the impact of low oil prices on the Russian economy, as well as the impact of Western sanctions imposed over Russia's involvement in Ukraine's crisis.
After posting fresh losses early Wednesday, the ruble was up and down all day before settling at 3 percent higher at 65 rubles at 4 p.m. Moscow time (1300 GMT).
The ruble even lost ground on Tuesday after a surprise move by Russia's Central Bank to raise its benchmark interest rate to 17 percent from 10.5 percent — a move aimed to make it more attractive for currency traders to hold onto their rubles.
One reason why the ruble advanced Wednesday is that Deputy Finance Minister Alexei Moiseyev was quoted by the Interfax news agency as saying the government is going to sell foreign currency "as much as necessary and as long as necessary." That, the hope is, would relieve the pressure on the ruble, particularly against the dollar.
Prime Minister Dmitry Medvedev hosted a meeting with the heads of Russia's largest exporters and pledged to implement a "package of measures" to stop the decline of the ruble.
Another option available to Russian authorities could be imposing capital controls, but Russia's Economic Development Minister Alexei Ulyukayev has denied that the government is considering doing so. However, he said the Central Bank rate hike came too late.
Russian officials, meanwhile, have sought to project a message of confidence on state television, dwelling on the advantages of ruble devaluation, such as a boost to domestic manufacturing.
Whatever happens with the ruble, the Russian economy is set to shrink next year by 0.8 percent even if oil prices stay above $80 per barrel. With oil prices now below $60, there are fears the Russian economy could contract by up to 5 percent.
The ruble could come under further pressure this week as President Barack Obama is expected to sign legislation authorizing new economic sanctions against Russia.
The German government's coordinator for relations with Russia, Gernot Erler, said the economic crisis in Russia was largely the result of the drop in oil prices, not the sanctions imposed by the West.
"It's an illusion to think that if the sanctions were to fall away tomorrow, the Russian economy would suddenly be all right again," Erler told rbb-Inforadio on Wednesday.
Vladimir Kondrashov in Moscow and Frank Jordans in Berlin contributed to this report from Berlin.