Thread: Devaluation of rouble

When the rouble was devalued in 1998 what sort of effect did it have on average Russian? Did it wipe out savings? Or did people tend not to save anyway?

I don't think devaluation wiped savings per se. It was inflation that preceeded it. When the ruble was devalued in 1998 it caused a huge dip on US stock exchange (see Dow Jones Index).

Originally Posted by BJ

When the rouble was devalued in 1998 what sort of effect did it have on average Russian? Did it wipe out savings? Or did people tend not to save anyway?

I had the feeling in the beginning of the summer of 1998 that something will happen. So I spent ALL money. (I bought new computer, furniture, made repair in my apartment, etc). So I had absolutely nothing to be devalued. Otherwise, I would have partly lost my money.

Thanks guys! Does it sound realistic if I wrote in my novel about a bank manager who lost money during the period of inflation and then devaluation? Or would he have he have sensed trouble brewing like you Alex_Ivanov?

Originally Posted by BJ

Thanks guys! Does it sound realistic if I wrote in my novel about a bank manager who lost money during the period of inflation and then devaluation? Or would he have he have sensed trouble brewing like you Alex_Ivanov?

Unfortunatly it doesn't. I worked in a bank in that time. There were bad simptoms at least a week or two before crisis. The refinancing rate grew up from 27% to 70%(i am not quite sure but something like that) but currency exchange rate didn't. I had bought about $500 then, so when a guy from capital issues department came to our office and said "What the f@#k is going on? Do you know guys that buck has flied up to 12 rubles(it was 6 in the morning and it was 25 some days after) and our currency department stoped currency exchanging operations today?" I took it quite calmly. I worked in a bank for about 3 years, from 1997 to 2001 so if you are interesting i can tell you more about russian banks in that time. But one thing I am perfectly sure - a bank manager who lost his money then it sounds absurdly for me.

Originally Posted by BJ

When the rouble was devalued in 1998 what sort of effect did it have on average Russian? Did it wipe out savings? Or did people tend not to save anyway?

There were two distinct events in 1998.

The actual 1000 times "devaluation" took place in spring (1st March?). It hadn't much effect actually. Just three zeroes throws away (and some neat sense of (almost) soviet-time nostalgia looking at price tags).

However, if you're talking about "August crisis", it had MUCH of effect. But mostly it affected import-oriented trade companies. For example, nearly 30-50% computing equipment shops just closed.

Originally Posted by Scorpio

The actual 1000 times "devaluation" took place in spring (1st March?). It hadn't much effect actually. Just three zeroes throws away (and some neat sense of (almost) soviet-time nostalgia looking at price tags).

It took place in the 1st of January.

I understand what happened much better now thank you! So although you wouldn't have lost roubles, imported goods would be dearer and you might then not be able to afford them. I think I'll make my bank manager lose money some other way.

Originally Posted by BJ

I think I'll make my bank manager lose money some other way.

Whose money he has lost? He could lose money of the bank but could not lose his money. The salaries in banks were very tricky then.

JJ - what do you mean by salaries were tricky? I'll give a brief bit of plot so you can see where I'm coming from. Four members of family (mama, Papa, Babushka and Dedushka) are killed in accident. Remaining family member has to pay for funerals, pay off debts, sell a few items and is left with about $4000. She is going to US for a year to teach at University. I really need father to be bank manager. I'm not sure what his salary would have been. Mother was University lecturer. Grandparents just a drain on their income.

Can't someone write a happy story about Russians for once?

Hmm 'happy story'? I must have missed that bit in Shakespeare classes : the histories, the tragedies, the comedies and the 'happy stories'

Btw I recently started 'Master and Margarita'. Weird - what is going on with this cat?
But I loved this bit about lebensraum:

Originally Posted by Bulgakov

The news of Berlioz's death spread through the whole house with a sort
of supernatural speed, and as of seven o'clock Thursday morning, Bosoy began to receive telephone calls and then personal visits with declarations containing claims to the deceased's living space. In the period of two hours, Nikanor Ivanovich received thirty-two such declarations.
They contained pleas, threats, libels, denunciations, promises to do
renovations at their own expense, references to unbearable overcrowding and the impossibility of living in the same apartment with bandits. Among others there were a description, staggering in its artistic power, of the theft from apartment no. 51 of some meat dumplings, tucked directly into the pocket of a suit jacket, two vows to end life by suicide and one confession of secret pregnancy."

Pravit my story isn't totally miserable. The main Russian character is a brave, resourceful individual. I admit there are a few shady characters who happen to be Russian but there are also bad Americans. I like to be fair!

Waxwing I liked that too. It reminds me in a a sort of opposite way of the complaints my daughter made about her latest accommodation in a city she hates. 'I can't get my towels soft because the cretinous landlord is too mean to provide a tumbledrier, plus the toilet only flushes with a spoonful of water, the bath takes an hour to fill, the sun never shines in the back garden and the absolute worst thing of all - there is no pub within walking distance. How do you expect me to live like this!! Eh mum Tell me!'

No soft towels... a harrowing plight indeed .. I wonder the UN doesn't set up an emergency relief fund for English Women Without Soft Towels.

Instead of wasting all its time on landmine victims and Chechen refugees.

Originally Posted by BJ

JJ - what do you mean by salaries were tricky?

I've sent a private message to you. Have you recieve it?

Thanks JJ. Just got it.