Dollar-loving Russians cling to U.S. currency
By Karl Emerick Hanuska
MOSCOW, Aug 16 (Reuters) - A fall in the U.S. currency has put world
financial markets on edge, but dollar-loving Russians said on Thursday they
had few fears of a major slide and still trusted the greenback more than
their own rouble.
Faith in the dollar has seen Russians build up an estimated $50-60 billion in
savings under their mattresses since the early 1990s when it first became
legal to own foreign currency.
So with Russians holding the largest amount of dollars outside the United
States, talk of a slide could trigger concern. But people in Moscow have been
calm so far.
"How many times have we seen the rouble crash in the last 10 years? Too many
times to count that is for sure," said Lenina Feinman, who sells vegetables
at a market.
She said that before the 1998 financial crash she saved roubles, but then the
currency shed 75 percent in days, nearly wiping out her savings as they
trapped in an account in a bank which swiftly shut its doors to customers.
Feinman also recalled poorly planned currency reforms that forced surprised
citizens to queue for hours, sometimes, days to exchange cash roubles for new
bills. The only other option was to sell cheaply to speculators or see them
lose all value.
"All I can save goes into dollars now," Feinman said. "I've only got a few
years left before I have to stop working and then it will be the dollars that
I've managed to save that I will live off and not my miserly rouble pension."
Feinman is not alone in her sentiments. An informal poll carried out by
Moscow's Ekho Moskvy radio showed 80 percent of Russians put more trust in
the dollar than in the rouble.
A report released by Dresdner Bank Group <DRSDn.DE> said 65 percent of
Russians held their savings in hard currency, most of which is dollars.
EVERYONE WANTS "BUCKSI"
People walking along a key tourist street not far from the Kremlin were
unconcerned by reports that the dollar had touched a five-month low against
European currencies.
"I don't care what happens with the dollar anywhere else," said one man.
"People here have too much confidence in the dollar for it to fall. 'Bucksi'
are what everyone wants."
Olga Voronova, an office worker, blamed currency speculators for a lack of
roubles at some exchange points around Moscow and dismissed speculation that
the dollar could fall.
"People here are always speculating on something," Olga said as she changed a
$50 note to do some lunch time shopping.
She described as foolish a much-talked-about forecast by Tatiana Karyagina,
an economist who was prominent during Russia's early economic reforms, that
the dollar was poised to lose as much as 50 percent against the rouble in
coming days.
In an interview broadcast on Russian television on Wednesday, Karyagina, who
works for an institute affiliated with the Trade and Economics Ministry,
called the dollar "nothing but a pyramid scheme" set to collapse due to U.S.
economic troubles.
"That is simply hysteria and I think most people understand this," Voronova
said.
Currency dealers said there was no panic in trade and that the dollar was
steady against the rouble. The central bank set its key exchange rate little
changed at 29.35 dollars per rouble on Thursday after a previous 29.34.
