Crimean Deputy Prime Minister Rustam Temirgaliev has told RIANovosti [5] that the region will abandon Ukraine's Hyrvnia:
- *CRIMEA TO SWITCH TO RUSSIAN RUBLE APRIL 1: RIA NOVOSTI
This is not a total surprise as Reuters reported the Crimean Deputy PM stating "we are ready to introduce a ruble zone," a week ago.
For the last few years the UAH/RUB exchange rate has oscillated around 38 in an 'almost' peg anyway...
[6]
But this move would isolate Crimeans from the potentially large devaluation that capital flows would create should a default occur (which looks increasingly likely)
From Reuters last week [7]:
The Ukrainian region of Crimea could adopt the Russian ruble as its currency and "nationalize" state property as part of plans to join the Russian Federation, a regional official was quoted as saying on Thursday.
Interfax news agency cited Rustam Temurgaliyev, Crimea's vice premier, as saying: "All Ukrainian state enterprises will be nationalized and become the property of the Crimean autonomy."
Hoping Moscow would let Crimea become part of Russia, he said: "We are ready to introduce the ruble zone."
Of course, this may lead to the emergence of an even more broad 'black market' for dollars or rubles in Ukraine as we are sure the Ukraine government would fight back with capital controls of some sort.