Dollar Plunges in Street Trade
By Torrey Clark and Kirill Koriukin
Moscow Times
The dollar plunged against the ruble at several exchange points throughout central Moscow on Tuesday following the largest terrorist attack in American history.
People lined up late into the night to sell dollars at prices as low as half the official Central Bank rate of 29.46, causing several exchange points to run out of rubles.
One point, run by Bank Paritet, set its buy rate at 27 rubles to the dollar at 6:30 p.m., after Russian radio and television reported the collapse of the World Trade Center towers in New York. As the line slowly moved, a worker briefly posted a rate of 20 rubles, but accepted dollars at the previous rate -- then removed the sign completely just a few minutes later and closed for "technical reasons."
"All our rubles have been sold. The rush started this evening after the news broke. The bank called and said to lower the rate to 20, but we'd already closed," said a manager at an exchange point near the Sokol metro station. "I sympathize with the United States," he added.
The sell rate for rubles remained at above 29. Few were buying.
"At 8 o'clock I heard the news. I had $500 on me and decided to exchange it. I was just about to sell my flat, thank god I didn't," said Igor Fillipov, 45, a construction worker. "Still I think the drop is temporary," he added.
"I think the dollar will rise. Anytime there is war, crisis, there is a lot of work to be done. Imagine how much has to be rebuilt. Employment will rise, the dollar will rise," said Sergei, 33, a businessman who declined to give his last name. He had come to the exchange point because he "just needed some rubles. That's all."
The U.S. Federal Reserve released a statement to reassure markets that it is ready to protect the U.S. banking system if necessary. "The Federal Reserve is open and operating. The discount window is available to meet liquidity needs," The Associated Press reported.
Several traders said the events in America were unlikely to have any immediate effect on the market.
"It is difficult to predict at this stage what is going to happen. ... If America sees this as a terrorist act and leaves it at that, people will continue to buy dollars," said Kirill Tolcheyev, head of the hard currency department at Rosbank. "If America declares war, they'll continue to buy dollars. There could be a massive attack on the ruble. ... People would invest in dollars to reinvest in other currencies later, and they are likely to prefer the yen to the euro."
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