After years of life in a growing, globally connected economy, Russians find themselves in a country increasingly unplugged from the world.
Following President Vladimir Putin's invasion of Ukraine, a sweeping wave of sanctions by the European Union and the U.S. has combined with an exodus of foreign companies and investors, leaving Russia more isolated and economically restricted.
On Tuesday, Nike and Apple closed their online stores in Russia. Earlier Tuesday, the world's biggest shipping lines, MSC and Maersk, suspended container shipping to and from Russia. Airplane giants Boeing and Airbus have both stopped supplying parts and support to Russian airlines.
The ruble has fallen as interest rates soar
For several days, long lines formed near ATMs around Russia as people rushed to withdraw cash — both foreign currency and rubles — amid fears of a breakdown in electronic banking.
The value of the ruble has plummeted to a record low, less than 1 cent, as many people watched their savings erode in Monday's free-fall of the Moscow stock exchange. The indexes remained closed as of Wednesday.
The Russian Central Bank more than doubled its key interest rate to 20%, after the U.S. and allies froze much of its foreign reserves that would normally be used to prop up the ruble. Last week, Moscow Times correspondents reported that Moscow banks and ATMs were no longer doling out euros and dollars. They remain in short supply.
The Kremlin has in turn banned all Russians from transferring foreign currency abroad and ordered exporters to exchange 80% of their foreign currency proceeds for rubles.
Russian authorities are also cracking down on public expressions of opposition to what the government continues to call "a special operation" in Ukraine. Russian news organizations — and even reportedly Russian Wikipedia — are facing fines and threats of blockage for the use of the word "war" in reports about the military crisis. Almost 7,000 people have been arrested at anti-war protests.
Prices are climbing and people are stocking up
On social media, Russian shoppers are noting early price increases for some products, particularly electronics and appliances. Following past sanctions, the country had built up domestic production, mainly of food, but people still depend on technology, medication and other imports.
Uncertainty over future prices is prompting some people to stock up.
"For the past few days, it's been like Christmas for us," one electronics-shop assistant told the Financial Times. "People are ready to buy things even [though] we have been raising prices every few hours based on the forex situation."
Several of Russia's largest supermarket chains have agreed to limit price increases to no more than 5% for dairy and bakery goods, sugar and some vegetables, according to the Russian state news agency TASS, citing federal antimonopoly authorities. Russians were already facing inflation on foodstuffs due to pandemic disruptions of the supply chain.
Global restrictions have affected credit card payments and left Russian tourists stranded abroad
Many people in Russia who work for foreign companies have been anxious about being able to receive pay, as the first batch of key Russian banks has been booted from the interbank SWIFT system to target oil and gas profits. A similar anxiety has spread to those outside Russia who receive payments from within the country — for instance, for remote tutoring or freelance work.
Tens of thousands of Russian tourists were abroad as almost all European countries and Canada banned Russian flights from their airspace. Russian tour operators say the number of tourists outside the country may be over 150,000, with some 27,000 in areas directly affected by air travel bans. The U.S. has now imposed its own ban, too.
Visa and Mastercard have blocked the sanctioned Russian financial institutions from their payment networks. Russian authorities say existing payment cards remain operational inside the country but cannot be used on foreign websites, according to state-owned RIA Novosti news agency.
Car and auto parts makers have also pulled back from Russia, including Swedish-based Volvo, British Jaguar Land Rover and American Ford. Fashion retailer Asos has reportedly suspended sales in the country.
International artists and cultural organizations have also imposed their own restrictions. Disney, Warner Bros. and Paramount are pausing theatrical releases of new films in Russia. Musicians and groups including Franz Ferdinand, Nick Cave and Green Day pulled out of upcoming concerts in the country. And the Cannes film festival and Eurovision song contest both rejected Russian delegations from performing this spring.
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