As the U.S. and its allies continue to impose crippling economic sanctions on Russia following its invasion of Ukraine, experts believe things will only get worse in the days and weeks ahead for ordinary people, CBS News is reporting.
Apple Pay and Google Pay no longer work on Moscow's metro system, leading to long queues as people fumble about for cash pic.twitter.com/ezaLZneKiJ
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Russia’s central bank is struggling to support the country’s currency, the ruble, which fell about 30% against the U.S. dollar on Monday. To shore up the currency, Russia’s central bank has more than doubled its key interest rate to 20%. The Ruble’s plunge will result in Russians facing the prospect of higher prices and curtailing foreign travel, plus also inflation of consumer goods and more.
“Before the weekend, signs emerged that the war in Ukraine was causing panic among Russian households and businesses. Russians queued at bank branches and cash machines were emptied as people tried to exchange their roubles for foreign currencies,” said Tatiana Orlova, an analyst at Oxford Economics, in a note sent Monday to clients.
Meanwhile, Moscow’s department of public transportation has warned residents of the city during the weekend they might have trouble using Apple Pay, Google Pay, and Samsung Pay to cover fares because the Russian bank that handles the transactions was among the entities hit by international sanctions. Citizens have been scrambling to use cash instead for fares.
VTB which handles transactions for these mobile wallets such as Apple Pay, was hit by international sanctions.
At least half of Russia’s estimated $640 billion hard currency stockpile is now frozen.
“There were local reports of people buying white goods [such as stoves and other large home appliances] to turn their cheapening roubles into something with tangible value,” wrote Orlova.