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. Last Updated: 07/27/2016

Food Prices Jump as Ruble Falls

Prices for staple goods rose significantly Thursday in reaction to the steady fall of the ruble, but there was still little sign of panic buying, Russian shop owners and consumers said.

"From vodka to water, everything's going up," said Marina Suruyagina, sitting behind the counter at a supermarket. "Our vodka is twice as expensive as it was a week ago, and cigarettes are also up."

Like the ruble rate, which varied wildly between currency exchanges, prices were low at stores that still had old stocks, while other sellers boosted their prices after suppliers delivered new goods at the start of the month.

Prices are only likely to get worse. The ruble crashed further on Thursday, trading on the streets at around 17 to the dollar. At the beginning of the week it was trading close to eight.

Fearing the price hikes will drive more and more capital out of Russia, the country's Central Bank announced a number of new foreign currency controls on payments of exports and imports. The new rules, which concern Russian-based entities, take effect Friday.

At one of Moscow's main open air markets, where turnover tends to be quick, prices varied from place to place, but were invariably up.

"Food is 50 to 60 percent higher," said Sonya Aleyeva from behind a small kiosk. "The government isn't controlling prices, and around here they've been let loose completely."

Aleyeva said bread and milk prices were up about 10 percent, and the cost for a kilogram of some types of sausage had leapt from 22 to 40 rubles, a jump that matches the ruble's devaluation by about half in the last week.

Those who will be hit hardest by the ruble's fall were painfully aware of how much the new prices would chip away at their meager earnings.

"A package of sugar now costs five rubles instead of four," said pensioner Yevgenia Afanasyeva, who lives on 400 rubles ($23 by Thursday's exchange rate) a month.

"Flour is up at least 15 percent" and cooking oil has more than doubled, she said.

Afanasyeva said her fear that prices would continue upward led her to buy as much as she could with her small pension now. Pensions, unlike prices, are not expected to adjust to the ruble's slide because the government is so short on cash.

"Without a doubt, I'm buying more. Everybody's buying more," she said. "In any case, what people can buy, they buy."

Still, some store employees said business was actually down, and shelves were full in central Moscow. "I personally am not buying any more," said Suruyagina, the supermarket clerk.

"I don't think there will be a shortage of goods because people can't buy at these prices," she added.