The buying power of the crumbling ruble

Red Square

When we visited Russia earlier this month, we didn’t think the exchange rate could get any better. It floated between 48-53 rubles to the dollar. We were able to visit museums, restaurants and theater performances in several cities, on a dime. We benefited from the volatility with cheaper hotel rooms, emptier flights and short museum lines. It felt like a win-win for all. We spent less and the retailers sold more.

But there’s a fine line between savvy travel and taking advantage of a country’s crumbling currency. It’s obnoxious to flaunt dollars in an economy that (arguably) suffers as a result of the government that issues that dollar. I’m not an economist but I have traveled in several countries saddled with US or EU sanctions: Myanmar (Burma), Tunisia, China and Israel. Friends of mine have visited Greece, Cuba and Iran. We all agree that trade sanctions fail to change the behavior of the affluent but, rather, hurt the poor.

Case in point, we didn’t see any suffering in St. Petersburg, Moscow or Tula. Instead, we saw a lot of discretionary spending.

In St. Petersburg, we watched fancy, expensive cars like Lamborghini, Ferrari and Bentley parade up and down Nevsky Prospect. In Moscow, we watched consumers line up at high-end shops like Leica, Manolo Blahnik, Mont Blanc and Hermes at the famous GUM shopping mall. In Tula, we were surprised at the proliferation of food chains and franchises, like Burger King, Subway, Sbarro and Domino’s. In grocery stores, consumer goods and frozen foods made by American companies Proctor and Gamble and Mars lined the shelves.

At a quick glance, it didn’t appear that anything was amiss. American investors were still exporting, anti-western sentiments were low and inflation was flat. Despite the Central Bank raising interest rates, people remained positive and many even espoused the benefits of ruling with an ‘iron fist.’

So, should any of these issues hold travelers back from visiting Russia? As long as the Russian Consulate is still issuing entry visas and maintaining low fees, I repeat a resounding “NO!”

Visit and you too will be amazed by the country’s rich history, strong traditions and important contributions to science, technology and arts. Sip tea from a samovar, attend the ballet, savor a classic bowl of borscht, bathe in a Banya and learn to follow some of the Russian superstitions. You’ll save money and decide for yourself if Russia’s darkest days are ahead or far, far behind. Hopefully the latter.

Bentley Dealership

Leica Shop at GUM