The amount of cash in Russia increased by 286.4 billion rubles (2.9 billion euros) during the first two weeks of August – after a growth of 643.4 billion rubles in July and about 450 billion rubles in June. Since the beginning of the year, the increase amounts to about 2.45 trillion rubles (24.9 billion euros).
Read more Young man «earned» almost a thousand by selling a «copy» instead of a phone to a woman from Klaipėda
Cash withdrawals in July became historically the largest recorded for the month of July, said Sberbank’s Chief Financial Officer Taras Skvortsov. According to him, such a high demand for cash has not been observed in recent years, except for isolated crisis episodes. Sberbank believes that during 2026 the amount of cash in circulation in Russia may increase by about 3.8 trillion rubles.
Higher cash demand than in 2022
The current growth rate has already exceeded the entire 2022 figure – then the amount of cash in circulation increased by about 2.3 trillion rubles. More was recorded during the pandemic year 2020 – about 2.8 trillion rubles per year, writes the portal “Agentstvo”.
Withdrawal of funds from banks causes liquidity problems and burdens the financial sector, which is already under pressure due to increasing volumes of non-performing loans, a former high-ranking Russian official told the publication. Liquidity problems are already complicating the financing of Russia’s budget deficit through the issuance of government bonds – due to cash withdrawals, banks find it harder to allocate funds for the purchase of federal loan bonds.
What are the reasons
Sberbank linked a significant part of the current cash surplus to corporate clients: companies have been less likely to return cash income to banks through cash collection and more often use it for payments to employees and suppliers. Another reason cited was communication problems, which make it difficult to pay for goods and services by card.
A different explanation is provided by The Washington Post. A former Russian finance official speaking anonymously said that people’s nervousness is growing because “drones are flying” and “everything is burning”:
“Perhaps people are starting to apply simple everyday logic: it’s better to keep cash under the mattress than in the bank, where at some point it might not be returned.” According to him, this is a problem for some banks: they did not expect such an outflow, had funds invested in other assets, and now face the fact that clients withdraw about half a trillion rubles every month.
Read more Commemoration of the Baltic Way in Kaunas: a concert awaits on the roof of the «Science Island»
Fear that the authorities will nationalize deposits
A former employee of the Russian Central Bank, senior researcher at the Berlin Carnegie Center Aleksandra Prokopenko explained to the publication that cash withdrawals indicate a lack of trust in banks and the financial system:
“All this is a consequence of fear that the government will do something with the banking system, that it may nationalize deposits.” She herself considers nationalization unlikely but does not rule out the possibility of restrictions on cash withdrawals.
Problems are further complicated by attempts of large companies to withdraw funds from Russian regulators’ control due to fears that assets may be confiscated, said the former Russian official.
Concerns that the state may seize large companies’ revenues are growing due to the increasing budget deficit, the publication writes.
“If the government needs money, Putin will simply seize the assets. He doesn’t care,” a person close to a Russian billionaire told the publication, adding that, in his opinion, “this is exactly where everything is heading.”
Read more Aurelijus Veryga. Will it be enough for politicians to agree on demographics?
