Yahoo Finance Apple Halts Web Sales Amid Rouble Crisis
Apple (NasdaqGS: AAPL - news) has halted online sales in Russia as consumers scramble to buy big-ticket items amid steep falls in the value of the rouble.
The volatility of recent days culminated in the currency's biggest one-day drop against the dollar since 1998 on Tuesday, with the rouble's worth plunging more than 15% in just 48 hours despite central bank action to raise its core interest rate to 17%.
Russia's finance ministry said on Wednesday it had started to sell its US dollar reserves to buy roubles - sparking a revival in the currency by as much as 6% with 64 roubles buying one dollar.
Dubbed 'Black Tuesday' by Russian media, the exchange rate at one point in the day was almost 80 roubles to the US currency.
The rouble has suffered catastrophic losses as traders fret 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.
News agencies were reporting that rather than forcing shoppers home, the currency's plunge had sparked a spending spree on items such as TVs and cars as consumers bagged what they needed ahead of looming price increases - a result of the rouble's weakness.
The official rate of inflation is currently 10% but the pace of price increases is tipped to soar as Russians prepare for New Year - their main holiday.
Apple, which raised its prices in Russia by 20% last month, said it had halted online sales of its products because the rouble's volatility meant it was unable to set prices.
AFP reported that at an Ikea shop, the section selling fitted kitchens was packed with customers ahead of price increases the chain is implementing from 18 December.
Ikea said: "The number of people in the stores has gone up also because of prices going up."
The Swedish firm had previously promised to keep its prices the same for 2014, but the chain then explained it "could not be independent from external factors".
A consequence of the weak rouble - which has lost about 60% of its value this year - is the growing cost of imports.
The currency crisis was sparked by the country's reliance on oil prices, which have fallen 45% since June, with the Western sanctions also contributing to the capital flight, as well as counter-sanctions by Russia in refusing to import some foreign goods.
A note by investment firm Panmure Gordon predicts Brent Crude could topple to $30-per-barrel by the end of January - half its current level.
Russians have lived through several serious economic crises in the last 25 years, when many saw their savings go up in smoke.
Analysts suggested that the tactic of going shopping when the economy gets tough may distinguish Russia from the West.
Igor Nikolayev, head of the FBK Strategic Analysis Institute, said: "In this way, Russia is different from developed countries.
"There, when a crisis begins, people immediately start saving.
"In our country, when a crisis comes, it is accompanied by a steep loss of value of the national currency and people abruptly start spending and for a time this softens the situation somewhat."
