Goodbye Russia. Citizens withdrew a record amount of foreign currency for export in four years 19.08.2022
In June 2022, the Russians withdrew a record low for four years of currency volume from the country. The amount of funds placed on accounts and deposits in banks last year reached 266.1 billion rubles, or, at the average rate, 57.2 rubles per dollar, almost $4.7 billion – this is the maximum for the period of publication by the Bank of Russia such statistics (since 2018), writes RBC. The news agency is based on calculations based on data from the Central Bank on the operation of households.
The figure has more than tripled from $1.5 billion in May. The previous surge was registered at the beginning of the event, in August – $4.3 billion.
As of July 1, Russian households have 2.29 trillion rubles in foreign accounts – $ 44.7 billion in equivalent at the exchange rate at this rate. The volume of these funds increased by 11.6% in May after an increase of 4% in May.
In Russia, according to the Central Bank, citizens kept 3.93 trillion rubles, or $76.7 billion, in foreign currency accounts and deposits as of July 1. The volume of funds has increased since the beginning of the year by 20.2%, or $19.4 billion. The volume of cash foreign currency in the hands of the population increased by $11.5 billion, or 13.5%, over six months. The volume of foreign currency on accounts in foreign banks increased by $14.1 billion, or 46.1%, over the first half of the year.
Why currency is leaking
Experts name several factors that cause the increase in the income of Russians.
Egor Susin, Managing Director of Gazprombank Private Banking, commented on a sharp increase in the surplus of non-cash foreign currency in the foreign market – banks do not need so much currency, and they made the conditions for storing dollars and euros uncomfortable for citizens, for example, they began to introduce fees for servicing foreign currency accounts.
Another factor influenced by the expert is the gradual easing of the regulator, introduced at the beginning of the rise in restrictions on the transfer of funds abroad. RBC recalls that in early March, the Central Bank introduced a limit of $5,000 for transit transfers for citizens. This ceiling increased to $10,000, $50,000 and $1 million. At the same time, banks are expanding the commission by setting limits on foreign exchange transactions for SWIFT transfers, except in cases where such transactions are terminated.
Egor Krivosheya, Head of Research at the Skolkovo-NES Center, believes that restrictions on the storage, withdrawal and transfer of funds in foreign currency are pushing citizens to look for other options for storing and using money.
He also recalls that some Russians, after the start of the Ukrainian movement abroad, while continuing to receive money from the Russian Federation – from their employing companies or relatives.
There is also “card tourism,” Krivosheya points out: Russians travel to some countries to apply for Visa and Mastercard cards – now they cannot be used abroad after they leave the country.
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Outflow fixed?
According to Yury Belikov, director of the managing rating agency Expert RA, Russians can maintain a stable foreign currency in cash, but its volume in the hands of the population will decrease in the face of restrictions on the increase in foreign exchange transactions and as needed. Activation of currency outflow accounting in non-resident banks, especially in the CIS countries, is not envisaged with the acceptance and caution of compliance by foreign banks due to the risk of secondary deviations.
Susin from Gazprombank Private Banking is immune to the fact that the outflow of funds from the population abroad could increase in September (we can talk not only about the transfer of funds from accounts, but also about foreign currency purchases with its subsequent transfer): in the first months of summer, according to him , the ruble was strong enough to activate this outflow. In the coming months, according to his forecasts, the trend may continue, but without new records. He predicts a “background” outflow of $3-4 billion in the month to the end of the year.
Central Bank observations
Earlier, the Bank of Russia reported that individuals bought more foreign currency on the Moscow Exchange than they sold. The amount was a record for this category of participants – 237.1 billion rubles against 176.1 billion rubles in June. Foreign currency was acquired by citizens mainly through banks that made transfers to foreign accounts, the Central Bank. At the same time, in anticipation of the expected appearance on the bank accounts of individuals in foreign currency for $ 3 billion. According to the Central Bank, we can talk about the process of purchasing currency at a low rate and its subsequent transfer abroad.
The Central Bank also reports that the value of deposits in Russia has reached a new historical low – 11.5%. General Director of the Analytical Credit Rating Agency Mikhail Sukhov predicts the share of foreign currency deposits in 2023 at a level of less than 10% – he does not expect “revaluation” of deposits at the expense of the new currency.
The day before, the Central Bank gave advice to citizens on what to do with dollars stuck in banks. Experts of the educational project of the Bank of Russia “Financial Culture” noted that dollars are no longer such a reliable way of saving as they were calculated before, and those who find it important to keep part of their funds in foreign exchange countries have introduced an assessment against Russia, it is worth exploring the possibility of opening an account abroad.