Apple suspends online sales in Russia amid currency turmoil
"Extreme" swings in the value of the Russian Ruble have caused Apple to temporarily shutter its online store in the Eurasian nation, after a midnight interest rate hike sent the currency plunging nearly 20 percent.
"Our online store in Russia is currently unavailable while we review pricing," Apple public relations representative Alan Hely told Bloomberg. This is Apple's second currency-related move in as many months as the Ruble continues its free fall; the company raised the price of the iPhone 6 in Russia by 25 percent in November.
In the past week, the Ruble has closed as high as 77 and as low as 54 per U.S. dollar after opening 2014 at 32 per dollar. It experienced a dramatic 19 percent decline on Tuesday, after the central bank raised interest rates by 6.5 percentage points in the middle of the night.
"I am speechless," one emerging markets analyst told the publication when asked about the Ruble's slide, going on to call it "a failure for the central bank."
Apple CFO Luca Maestri addressed foreign exchange issues during the company's Q4 2014 earnings call in October, reassuring investors that Apple has anticipated problems with foreign currency fluctuation.
"It's a fact of life if the U.S. dollar strengthens, that creates a headwind for us both in revenue and margins for our business outside of the United States," Maestri said. "We have a comprehensive hedging program in place that mitigates the impact of foreign exchange. Over time, of course, these hedges roll off and get replaced by new hedges at new spot levels, and so the protection that you get from a hedging program is temporary."
Apple's online store in Russia opened in June of last year. It is the only direct sales path for Russian consumers, as there are no brick-and-mortar Apple stores in the country.