Apple Russia online sales halted on fluctuations in ruble

Apple halts online sales in Russia
Apple halts online sales in Russia   

Online sales of Apple products were halted on Tuesday over the volatile ruble.

"Due to extreme fluctuations in the value of the ruble, our online store in Russia is currently unavailable while we review pricing. We apologize to customers for any inconvenience," the tech giant said in a statement. It's unclear of how long it will take to adjust the prices.

Initially flat, Apple shares declined more than 1 percent after the announcement.

The plunging currency has made iPhone prices much cheaper in Russia. Apple closed online stores in Russia last month, before rising iPhone prices by nearly 25 percent, according to the Russian news site Lenta

The ruble fell sharply on Tuesday after the Russian central bank announced that it would hike its key interest rate to 17 percent, citing rising devaluation and inflation risks.

The bank had just raised the rate to 10.5 percent last week in an effort to stem a run on the currency.

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However, the decision failed to strengthen the struggling currency. The ruble was last trading at 67.92 rubles per U.S. dollar, compared with 65.50 on Monday before the rate announcement.

The ruble has declined some 60 percent since January as the country faces headwinds from the falling price of oil—Russia's main export.

Currency volatility makes it harder for producers to set prices and assess conversion rates.

Philip Uglow, chief economist at MNI Indicators, said the massive rate hike shows demonstrates the severity of the currency crisis.

"The situation now has gone beyond a discussion of fundamentals, which are clearly very weak, to a dangerous loss of confidence in the currency and the ability of the Russian authorities to control the situation," Uglow said in a note on Tuesday.

"Acting in isolation, however, the central bank will have a tough time convincing speculators and investors that it has the credibility and firepower to stop the rot."

He said an upswing in oil prices would help matters, but noted that doesn't seem forthcoming.