#3
Trud
No. 209
November 2, 2001 (?)
[translation from RIA Novosti for personal use only]
RUSSIANS ARE LESS INTERESTED IN THE DOLLAR
By Alexander PROTSENKO, Trud economic analyst
Russians' faith in the rouble has been getting stronger of late. The question is whether there's money to save.
The State Statistics Committee of the Russian Federation stated another drop in people's interest in freely convertible currency. Over the nine months of 2001, Russians' spending on its purchase accounted for a mere 6.1 percent of their overall money incomes. Last year, this indicator was a bit higher - 6.7 percent. Meanwhile, in 1997, the last year before the default, Russians spent nearly a quarter of their earnings to buy hard currency (in some months, up to 23-24 percent).
Over the past year, there's been growth in many spheres in Russia: average wages in the country as a whole have risen by a third (according to the data of the World Bank's Moscow office), the number of roubles in circulation - by over a quarter (according to the Central Bank's data - by 25.5 percent. Household bank deposits have grown by 40 percent. However, whereas rouble deposits grew by a little less than 40 percent, hard currency deposits increased by nearly 50 percent. This is despite the fact that for more than a year now rouble bank deposits are more profitable than hard currency deposits. This September, for instance, bank interest on rouble deposits (time deposits) was even higher than the inflation rate. At the same time, yield on dollar deposits was "zero." In normal, not financial parlance, this means that to keep savings in time rouble deposits is rather profitable: in September, the yield was higher than losses from inflation. Meanwhile, those with bank dollar deposits got nothing at all. However, they haven't lost anything either.
Today, hard currency deposits in Russia are kept mostly by wealthy people now who don't worry if they lose or gain 2 or 3 percent. Hard currency deposits for these people aren't a means of saving but rather a convenient form of keeping money which is mostly spent in foreign trips (with the help of plastic cards). As for rouble deposits, these are deposits of common Russian people (mostly pensioners). The average size of these deposits is very low not exceeding 3,500-4,000 roubles per person.
Hence the conclusion: over the past two years the authorities have managed to persuade the population that national currency can be trusted and that there's no need to chase dollars and keep them for a rainy day. Moreover, Russians are less afraid now of this rainy day, so they spend their incomes to buy not only basic necessities, but also less necessary items and even luxuries. At least, the data of the State Statistics Committee show that, with their incomes rising over the past year, Russians have not reduced but increased their spending on goods and services (last year, it accounted for 78.6 percent of money incomes, and now for 79.4 percent. At the same time, Russians have reduced the share used for replenishing (increasing) savings and purchasing securities (from 5.1 to 4 percent).
Such growing optimism must make political analysts happy. The more so that it is indirectly confirmed by two other factors. First, public opinion polls conducted by the All-Russia Public Opinion Research Centre (VTsIOM) show that the number of supporters of opposition and radical forces is declining in Russia. Thus, the share of the population ready to vote for the Communist Party of the Russian Federation (KPRF) at the end of September equalled 31 percent, whereas a month before the figure was 35, and in April 39 percent. Simultaneously, VTsIOM registered a rise in President Vladimir Putin's rating: whereas at the end of September his activities were approved by 73 percent of the population, a month later the relevant figure was 75 percent.
However, there's also a negative aspect in all these statistics. The figures show that too many Russians still live (are forced to live?) from hand to mouth, from pay day to pay day, without looking into the future. They have everything necessary to live a modest life now. However, their income levels are too low to think of something else.
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