Courcy's Special Alerts
Russian shops beginning to price in ‘conditional units’
The collapse in the value of the rouble, and consequent rise in inflation, has led to some shops in Russia beginning to price goods in ‘c.u.’ – conditional units. Price tags quoting conditional units were seen last week in shops in Khimki, near Moscow.
‘Conditional units’ were first used for pricing goods in Russia in 1993 at a time of a crashing rouble and high inflation. At the end of last week, the rouble was quoted at record lows of 72.94 per euro and 58.52 per US dollar. Last Thursday (11 December), the central bank increased interest rates to 10.5% in an attempt to halt the slide, but the real problem is the fall in the price of crude oil.
The Russian state’s finances remain relatively secure, with reserves of around US$416bn and government debt of below 10% of GDP. The corporate sector is more vulnerable, however, with US$100bn in debt due to be repaid during 2015.
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