Its rainy and cold in Moscow this weekend. The streets are empty and you don’t even find a lot of people in the metro. Moscow is unusually calm, almost like during the summer vacation time. A strange mood lays on the city. There is a sense of uncertainty mixed with insecurity. For the past months Russias government was downplaying the economy crises and even among bankers and finance people there was an unusual ignorance towards, what was happening in the rest of the world and what kind of impact it would have on this very fragile new economy in Russia.
Moscow is calm these days, but there is a storm out there. A fierce storm, moving in and nobody knows how much damage it is going to bring. The public was aware of this for a long time, but most of Russia acted in denial. The times were just too good and finally Russia was a world power again. Maybe not in the eyes of the rest of the world, but in the eyes of Russians and that from sport, to economy to geo politics.
Almost a year ago (Russian) people, guests on my parties, asked me about my opinion of the upcoming economy crises. I asked, which economy crises? Later on I followed up with friends from the finance area and all of them ensured me that Russia is in a solid state on its way up. Even though a crises would hit, Russia would be prepared with the 3rd largest cash reserve in the world. Bankers, economists and investors stated this again and again, but during the past 2 months this subject came up more often.
It seems, the Russians knew about the storm, but they were naively hoping it will change its course and move elsewhere. Now they finally see the dark clouds on the horizon and everybody is waiting what it will bring. It was Friday evening, when I bumped into the director of a large foreign bank, at a party of another ad agency. He just got off the phone with someone at the central bank and his face expression said it all. Get some cash, he advised us, the shit hits the fan this weekend and Monday it will probably be problematic. Nobody knows for how long. Do you think he was joking?, I later asked my partner Donald insecure. He wasn’t joking. In the meantime I received various calls from friends, who confirm the crises. They have learned about it from colleagues and other bankers.
On my way home from a business meeting today (where the crises was once again a main subject), I passed a few ATMs where people were lined up, trying to get cash tonight. Later I decided to change some of my Rubels into Euros or another foreign currency, but most of the exchange booths were out of any foreign currency, some even had closed already.
Moscow will probably be a different place tomorrow. Nobody knows what to expect and how this will affect our lives and businesses here. Some of the friends I warned over this weekend, were critical. Apparently the government guarantees each person savings with up to 700 000 Rubels. Large banks should be OK longterm. Still, the Russians lived through various crises in the last decade and they know that hard cash, best in a foreign currency, is the most secure way of storing money in these times and consumer confidence is low. Even if the government holds its promise, it will take time until that money is distributed and the main objective of everybody who has a Russian bank account may/will be to get the money out of the bank this Monday.
Expect long lines at the banks tomorrow. Also expect empty ATMs. I don’t know if its is really happening tomorrow. I am not a finance expert. I also don’t know what affect this will have on shops and daily life. I will surely write about it here on Moscow-Blog. Tonight, its quiet. Rain set in and its becoming a bit more windy, but nobody knows, if this is a big storm or just a bit of rain. Tomorrow and the following days will show.
Share