Russians ditch dollar for euro

DoreneFC at aol.com DoreneFC at aol.com
Wed Mar 19 09:48:17 PST 2003


I haven't not been to Russia in 4 years. At the time there were exchange booths all over the place in Saint Petersburg. Since this was pre-Euro, the most frequently posted rates, in addition to the dollar where Deutsch marks, Pounds sterling, and Finnmarks, and sometimes Francs (Swiss or French, depending).

In Ufa, things were a little more spotty, concentrated mainly in the middle of downtown. As I remember the rate were posted mainly in dollars or pounds. Also prices for everyday goods were posted in rubles, oddly enough either in old rubles or in new rubles minus about 3 0's from that year's devaluation. We didn't exactly go car shopping. So a relevant question is, outside of the capitals, how much does the exchange rate matter? Maybe I will write and ask a brother-in-law who pays some attention to the topic.

At this point, my knowledge of the situation is from watching the daily news. I know the euro exchange rate is better than the dollar one. I know Russians have lots of incentive to hide income and keep things off the books or under mattresses. Not to mention that banks are still unevenly reliable. But people do have various ways to do estimates...

Also I think it's a chicken and egg question: is the exchange rate better because more Russians want to buy the currency (say as a vote about something to do with Iraq) or do Russians want to buy the currency because the exchange rate is better? Have the Europeans suddenly started doing anything to help the Euro rate?

Sorry if this is more questions than answers, but maybe other people are better currency trading jocks than I am.

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