St. Petersburg, 21 August 1998 (RFE/RL) -- Amid confusion and uncertainty wrought by the ruble devaluation, life for many Russians has yet to be effected.
Consumers have not descended on shops to scoop up goods, and there has been no run on banks. Also, lines at most currency exchange booths remain small. But beneath this apparent calm there is a creeping feeling of anxiety that inflation is about to strike.
On Tuesday and Wednesday, after the confusion created by the government's sudden de facto devaluation of the ruble, many banks in St. Petersburg and elsewhere in Russia were not exchanging currency.
Jeff Robins, an economist at MFK Renaissance (an investment house) in Moscow told RFE/RL: "I would not say the situation has stabilized, consumers can expect to see inflation of about 20 percent soon, and the fall of ruble is probably not over."
St. Petersburg governor Vladimir Yakovlev said on Wednesday that the city will do everything possible to discourage price-gouging.
Yakovlev said that the Tax Service and Tax Police will step up checks on those shops and enterprises which have drastic price increases.
But, so far, most Russians have not been effected by the crisis. The reason, according to analysts, is that many of them simply do not have much savings, and those who do already keep most of it in dollars. Ironically, analysts say that the poorer one is, the less one will probably feel the effects of the crisis.
"I am poor, have no savings, cannot buy imported goods, and I already own all that I need---a furnished apartment and a car--- so I am not worried about the financial crisis," said Vladimir Smirnov, a pensioner.
For now, the brunt of the fallout has been limited to banks and financial companies, which have suffered great losses and are laying off staff. Businesses that rely heavily on imports have also been hit, having to buy in dollars and selling in rubles.
"The stock market and GKO market are dead," said Yevgeni Sidorov, an analyst and trader at Lenstroimateriali, a leading local brokerage house. "now everything depends on foreign players to keep the market alive. Only when they come back will we see a change for the better."
"I am quite worried by the current crisis because I have a small business that is dependent on imports," said Sergei Fomin, a tattoo artist in St. Petersburg. "The materials I use must be paid for in dollars. So now I have to ask clients to pay for my services at a higher exchange rate and not all can pay."
Valentina Askern, the director of a grocery store in the city center, said that she would almost certainly not raise its prices because 90 percent of the food items she sells are Russian-made.
It is estimated that Russia imports between 50 to 60 percent of its foodstuffs. But, this figure masks the fact that most basic staples are produced locally.
Still, in the long run devaluation is unlikely to help Russians industries because they will not be able to raise capital on international markets and because the confidence of foreign investors in Russia has been undermined, said Robins.