[Bloomberg] As Russia's central bank struggles to shield the ruble from the standoff over Ukraine, Vasily Isaev it may already be too little, too late to save his plans for a vacation in Italy."If you get your salary in rubles, a trip to the beach in Europe is going to be difficult this year," said the 37-year-old sales manager, looking up from his English homework in the park near Tverskoy Boulevard in central Moscow. "We're going to Bulgaria instead of Italy this year and we're renting an apartment a little further away from the sea."
Consumers like Isaev, spending more than a few months ago to fill a shopping cart with everyday items, may be squeezed most by the currency's decline as inflation quickens. Wobbling consumption threatens to knock out another pillar of the economy reeling from sanctions that stoked capital flight.
Unruffled by the central bank's emergency measures, the ruble has declined as an expanding list of U.S. and European Union sanctions in response to President Vladimir Putin's actions in Ukraine sparked a selloff of Russian assets. The ruble has weakened 8 percent this year, the second-worst performance after the Argentine peso among 24 emerging-market currencies tracked by Bloomberg.
The central bank has been trying to halt the decline by raising its benchmark interest rate twice in the last two months by a total of 2 percentage points. The ruble's weakening is increasing the cost of living by making imported goods more expensive.