Russians for the first time in a long time increased the volume of transactions with cash foreign currency: according to the Central Bank, in November the monthly increase amounted to 83 billion rubles, the maximum since March 2022. At the same time, the volume of deposits of Russian citizens in foreign banks has been declining for the second month in a row. Experts note that the trend may be associated with defects in the Central Bank’s assessments themselves, but they also assume a real outflow in the future.
The Central Bank reported that in November 2023 (the latest available data), Russians’ demand for cash rubles decreased. The volume of cash rubles decreased for three months in a row (by a total of RUB 478.5 billion), but the trend seriously intensified in November – the decrease amounted to RUB 324 billion. At the same time, the volume of cash rubles itself is still quite large, it exceeds 16 trillion rubles.
Foreign currency, on the contrary, was gaining popularity. As of December 1, its volume in the hands of the population in ruble terms amounted to 8.6 trillion rubles. (or $96.8 billion in dollar equivalent at the Central Bank exchange rate as of December 1). The volume also grew for several months in parallel with the decrease in demand for rubles. In November, the increase was RUB 82.8 billion, the highest monthly increase since March 2022 (then estimated at RUB 730.9 billion). As of the beginning of 2023, the volume of cash foreign currency amounted to 6.9 trillion rubles, which is equivalent to $97.6 billion.
At the same time, the volume of deposits of Russians in banks abroad by the beginning December amounted to 6.6 trillion rubles. ($74 billion) versus RUB 6.8 trillion. ($73.68 billion) a month earlier, according to Central Bank data. “The increase in household funds on deposits in non-resident banks, according to preliminary estimates, was less than in the previous month and amounted to 95.2 billion in ruble equivalent,” explained the Bank of Russia.
As the Central Bank clarified, the statistics of deposits of Russians in banks abroad may include money spent on the purchase of real estate and goods in foreign online stores. At the same time, Russians withdrew foreign currency from deposits in Russian banks in the amount of 29.8 billion rubles.
According to Gennady Fofanov, president of the investment platform InvoiceCafe, the dynamics of deposits in foreign banks hardly indicates that citizens have decided to reduce the volume of their investments abroad: “Neither difficulties with transferring funds nor the monetary situation in the Russian Federation contribute to this.” Vice-President of the Association of Russian Banks (ADB) Alexey Voylukov emphasizes that such data may have a very large error, since the Central Bank “has not had access to objective data on deposits of Russian citizens in banks in unfriendly countries for quite a long time.” “These estimates may be based on extrapolation of data on dynamics from friendly countries in relation to data from unfriendly countries that were available a couple of years ago,” the expert believes. “If estimates of Russians’ deposits abroad are based on data on capital outflows, then the error may turn out to be very large.”
At the same time, Gennady Fofanov clarifies, the policies of foreign unfriendly states are becoming tougher, for example, the Finnish government today announced its readiness to ban real estate transactions for Russians from the spring, therefore “ It is not worth excluding a real outflow of funds from deposits in foreign banks.”
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