Ruble collapse sparks outrage as food prices soar in Russia

The harshest criticisms are appearing on Telegram, targeting Kremlin spokesman Dmitry Peskov, who mocked Russians shocked by the ruble's decline. On November 27, one dollar was equivalent to over 120 rubles in Russia, compared to 90 in September. This marks the most significant weakening of the Russian currency since the start of the Ukraine invasion in 2022. On Thursday, the rate slightly recovered.

"The rise in the dollar exchange rate will not affect Russians because they receive their salaries in rubles," Peskov said. On the Russian-language Telegram service, there is a special stamp depicting a clown, which users employ to denote those making particularly foolish comments. Peskov's statement attracted thousands of clown stamps. Russians noted that "his daughter worked in Paris and earned in euros." "In our harsh land, heroes are left with lard and potatoes." "Brilliant strategist Putin, we started the war with the dollar at 60 rubles, now it’s double." "No more foreign trips, and what about food prices?" are among the prevalent grievances from Russians.

Below are Dmitry Peskov's words of reassurance to Russians, the Kremlin spokesman.

Russian economist Vyacheslav Shirayev warned that if the ruble's devaluation persists, food prices in Russia could rise by 20-30%, exacerbating inflation. It's not just about imported products. Vladimir Fisinin, head of the Russian poultry industry, cautioned that 98% of chickens are raised using foreign additives, so meat prices are likely to increase.

Gazprombank has been subjected to American sanctions, cutting it off from the dollar settlement system. The bank managed payments for Russian corporations selling oil and gas abroad. Blocking Russia's cash flow, and thus obstructing trade exchange, would be the ideal way to stop the war. It’s a shame it's happening only now," says Dr. Adam Karpinski, an economist and expert at WSB Merito University in Wroclaw, explaining the ruble's decline.

Let's add that Washington has introduced the threat of so-called secondary sanctions, which involve similar restrictions on entities continuing cooperation with Gazprombank.

"We would like to see Russia descend into an economic crisis, like the eruption of a societal rebellion, but for now, these are Western wishes," commented the WP interlocutor. He emphasizes that the costs of the war and economic impacts, such as high prices, will be borne by average citizens, but it's hard to determine how long they will endure. "This could be several years," he believes.

"In Russia, all imported goods will become more expensive, but are they essential for the Russians themselves? McDonald's has withdrawn from the market, but their lives didn't collapse. This society is structured somewhat differently. The average Russian—outside of large cities—believes they can survive as long as there are potatoes, alcoholic beverages, and tea from a samovar. They usually calculate: since there is a war, one has to suffer so that things will be better later," Dr. Karpinski continues.

According to Karpinski, Russia's economic issues will depend on the behavior of countries like China, India, and South American nations. "If they are willing to engage in barter, e.g., goods for raw materials, new restrictions won't be painful for Russia. As for food, Belarus, a long-time key supplier of these types of products, might be Russia's saving grace. Russia may import some goods via Kazakhstan or Turkmenistan," adds Dr. Karpinski.

On major Russian portals, the most read articles are about the ruble and the effects of its devaluation. "We will see price increases as early as February. Cucumbers and tomatoes will be the most expensive. Prices are hard to predict," said Russian journalist Alexei Elayev, deputy general director of the Spar chain in Russia.

The popular blog "Yarnarnyi Kaliningrad" considered this statement the "quote of the day," sarcastically noting that tomatoes and cucumbers are becoming the gold of Russian cuisine.

Earlier, a wave of publications went through Russian media with titles like "people stopped using butter." In Russia, people eat "bare bread" with cold cuts or cheese. This is reportedly the result of butter prices rising above the equivalent of $2.50 per stick. There were reports of decreased sales of butter.

The customs services of Kaliningrad reported cases of smuggling food from Poland. Dozens of kilograms of sausages from the Biedronka chain were seized. As for foreign trips, for many, they are now over, report Russian business editors.

Inflation in Russia is expected to reach 15%, but bank lending rates are already 30% annually, Russian economists claim. "However, I don't see any catastrophe for the authorities. My colleagues and I have always said that the stability of the economy is its capacity to support Putin's war, and that's all," commented Russian economist Vyacheslav Inozemtsev. He is quoted by "The Insider" magazine.

"With such a ruble exchange rate, the country's budget will be implemented with a surplus because oil is sold for dollars. The authorities will have additional rubles for the war and social spending. Yes, they will largely be devalued money, as we already lived in the '90s," Inozemtsev further explains.

It is possible that in response to reports about the effects of sanctions and the currency crisis, Vladimir Putin appeared in television broadcasts. He boasted about new Oreshnik missiles. He read from a note the test results, stating that dozens of guided warheads attack the target at a speed of about 2 miles/s. The temperature at the center of the explosion reaches 7,200 degrees F. Putin threatened that decision-making centers in Kyiv could be targeted.