Accessibility links

Russia: Calm Prevails In Vladivostok

  • Floriana Fossato

Vladivostok, 18 August 1998 (RFE/RL) -- Banks in the Far East city port of Vladivostok, seven time zones away from Moscow, were the first to open following the government's announcement of ruble devaluation yesterday. The public reacted calmly to the new situation.

The first deputy governor of Primorye, Konstantin Tolstoshein, told RFE/RL: "It is certainly an emergency situation, I was sure it would happen and I doubt the government will be able to keep the situation under control."

Vladimir Stegni, head of the regional department of international economic relations, said in a separate interview that the situation "is serious for Primorye," since the region "is importing up to 60 percent of its foodstuffs and households from Asian countries." He added that "it is clear that prices of those goods will increase and this will affect the public, not the traders, in the first place, because salaries will certainly not increase in accordance."

The situation in Primorye is particularly serious, as the region has been hit by a wave of strikes in the coal, health and other industries in the recent months, largely in protests against unpaid wages.

The government's announcement of a 90-day moratorium on payments of some foreign debts by banks and companies and a ban on foreign investing in short-term treasury bills (Russian acronym of GKO), has sparked concern among investors about Russia's ability to service its debt.

There were no visible lines in Vladivostok at foreign exchange booths operating today. The Vladivostok banks immediately increased their exchange rates for dollars, some up to 9.5 rubles to a dollar.

At the main Vladivostok office of Sberbank, one of Russia's main state banks, the foreign exchange teller was not working, ostensibly for "technical reasons." Sberbank has 23 foreign exchange points in Vladivostok and many more in the Primorye region.

Sergei Ivanov, a retired engineer, told RFE/RL that he had simply "come to have a look" after hearing television broadcasts that the ruble corridor had been widened and that this would trigger a dramatic jump of prices. But he said he would not expect a rush of people seeking to exchange their rubles into dollars, "because the majority of the population, exactly like me, simply has no rubles to exchange."

The manager of the Vladivostok branch of a Swiss company, Zeptor, said she was "very upset," because uncertainty on the ruble market had caused Sberbank to stop paying salaries to the 60 local employees of the firm. "The bank says they cannot pay the salaries, because they do not know exactly whether the official rate exchange of the ruble will remain the same," she said, declining to give her name.

Irina Yermakova, Sberbank's press officer in Vladivostok, told RFE/RL that the bank is "awaiting instructions. We do not buy and we do not sell. We want to see if the government will fix the rate."

Black market currency traders on one of Vladivostok's streets, were offering rates of 8 rubles to the dollar today, but told RFE/RL that there were not any clients. Some of them said they expected the rate to stabilize at 7 rubles to the dollar in the next few days.