The key facts

  • Electronics respond to the exchange rate within 1–3 months, cars within 3–6 months, clothing and footwear within 2–6 months
  • In imported fruit and vegetables, the effect may appear within a few weeks
  • Retail prices almost never fall by the same 10–20% by which the ruble strengthened

How quickly prices react to the exchange rate depends on the product

A stronger ruble may show up in retail prices within a few weeks or months — the timing depends on the product category and how quickly sellers restock their inventories. This was told to Gazeta.Ru by Alexander Bakhtin, investment strategist at Garda Capital.

From fruit to cars: benchmarks by category

According to Bakhtin, electronics usually respond to exchange rate changes within one to three months: a high share of imports and competition, including on marketplaces, speed up price revisions, but scarce models may not get cheaper. For cars, the benchmark is three to six months; the timing is affected by bulk purchasing, delivery, customs procedures and dealer inventories. In clothing and footwear, the effect may appear within two to six months, since stores buy seasonal collections in advance. Changes are noticeable fastest in certain categories of imported food, such as fruit and vegetables — there it can be a matter of a few weeks.

Why prices do not fall in proportion to the currency's strengthening

Bakhtin explained that when the ruble strengthens by 10% or 20%, the retail price almost never falls by the same percentage: only the foreign-currency portion of the cost decreases, while ruble expenses remain in the price — rent, wages, loans, taxes, domestic logistics and the seller's markup. In addition, sellers may keep selling batches bought at the previous exchange rate, and the benefit of a stronger ruble can be eroded by more expensive shipping, intermediary commissions and settlement costs. With weak competition or product shortages, businesses also keep prices unchanged. The expert's conclusion: a stronger ruble creates conditions for prices to fall, but does not guarantee it.