The Rhythm of the Falling Ruble

Before I set out on my journeys abroad, few things seemed so mystifying to me, and yet so dull, as discussions of international currency fluctuations. For one thing, I could never keep track of just what a "rise" or "fall" in a currency meant; for another, it was hard to see just what effect all of tihs could have on anyone's day-to-day life. To me, a dollar was a dollar was a dollar. The landlord might want a few more greenbacks this year than last, but whether the dollar was "rising" or "falling" at any given moment seemed about as relevant to my life as assignations at the court of some long-forgotten Duke of Saxony.

In this respect, as in so much else, Russia has been a real eye-opener.

For one thing, I now know what it means for a currency to fall against another currency. It means, pure and simple, that that currency is losing value when measured against the other currency. So when the ruble falls (as it has over the past few months) from 23 to the dollar to 36 to the dollar, it means the ruble is becoming worth less and less, in dollar terms.

As Americans rarely hold significant amounts of money in anything other than the Almighty Dollar, we tend not to be aware of what this means. The President and the economic wonks on television might prate on about how a rising or falling dollar is or is not good for the country's economy, but to Joe Six-Pack, these conversations might as well be in Sanskrit, for all he understands of them. But for Russians, it's quite another story.

One of the inescapable sights in Moscow--as inescapable as the perekhods across large roads and the blini stands outside the Metro--is what is called the obmen balyuti--the currency exchange kiosk. In New York, you can't go five feet down the sidewalk without running into a Duane Reade pharmacy or a Starbucks; in Moscow, you can't go five feet without seeing someplace to change money. This is true not just in the main tourist centers of the city, but everywhere. A few weeks ago, I went to a major mall on the northern outskirts of town to buy a reading lamp, and even there I saw no end of places to change money.

Russians have good reason to need so many places to change money, and to keep an eagle eye on what the ruble is doing against the dollar and the euro (changing rubles for sterling seems to be of less interest to Russians; every obmen balyuti displays the price for dollars and euros, but only a few advertise the price of a British pound). Although the ruble enjoyed a period of stability in the 2000s, due mostly to Russia's ability to sell oil at inflated prices, the ruble has been devalued multiple times since the fall of communism, and Russians do not trust it as a long-term store of value.

For the past few months, ever since the start of the current financial crisis in September, the ruble has been on a slide. When I came to Russia last May, the ruble was at about 26 to the dollar at obmen balyuti all over the city. In August, it reached a peak of 23.5 to the dollar. By New Year's, I was horrified to see the ruble hovering at thirty. But for a couple of weeks now it has stayed put at around thirty-six. Stories in the Moscow Times, Moscow's largest English-language newspaper, indicate that the government has taken steps to halt the slide, but many fellow teachers are skeptical about the government's ability to solve the problem. As oil prices have collapsed, rubles are flowing back into Russia, a situation that can only result in devaluation, or so I am led to believe.

The effect of all this on me has been to make it harder to save money, in dollar terms. My salary is worth less in dollars than it was a few months ago. At the same time, however, the ruble's slide has made me feel less guilty about the amount I spent eating out. Since I've been here, the price of a meal at McDonald's, in dollar terms, has slid from about $10 to about $7. It's hard to tell yourself you can't afford those fries when they are, suddenly, not much more than they would be in Missouri.