Russians withdrew the equivalent of two annual budgets of the Moscow Region from banks
The amount of cash outside the banking system is growing rapidly in Russia. According to the Central Bank of the Russian Federation, from July 1 to July 30 alone, the amount of cash in circulation increased by 620.9 billion rubles, setting a new monthly record.
July surpassed the previous high set in April, when the amount of cash in circulation rose by 607.9 billion rubles. In total, over the past six months—from February to July—Russians and businesses withdrew 2.543 trillion rubles from the banking system.
This amount is nearly equal to two annual budgets of the Moscow Region (about 1.3 trillion rubles) and nearly five annual budgets of the Krasnoyarsk Krai (527 billion rubles).
Sberbank Vice President Taras Skvortsov called the situation “an absolute record for this year and, overall, a historic high for July.” According to him, the outflow of cash has become one of the main problems for the Russian banking system and has already caused a ruble liquidity shortage at a number of financial institutions.
Sberbank believes that one of the main reasons for this phenomenon is the shift of part of the business “into the shadow economy” due to the increased tax burden. According to the bank’s forecasts, the volume of cash in circulation could grow by another 3.8 trillion rubles by the end of the year.
Economist Nikolai Korzhenevsky suggested that this large-scale shift to cash could indicate that major capital holders are anticipating a deterioration of the situation in Russia.
“We’re talking about people who may know that extremely negative events are about to unfold in Russia—an escalation, war, or broader geopolitical risks,” he noted.
According to the economist, some of the funds may be used to purchase cryptocurrency, with the assets subsequently transferred abroad. In his view, the massive demand for cash indicates growing concerns among wealthy individuals about the future of the Russian economy.
As a reminder, on the night of July 29, the Ukrainian Armed Forces carried out strikes on a number of military and infrastructure targets on the territory of Russia and in the temporarily occupied Crimea. Among the targets struck were the Ryazan Oil Refinery, a base for Russian Black Sea Fleet vessels, a radar station, and military logistics facilities.
SBU drones struck the Lukoil oil refinery in Perm, more than 1,500 km from Ukraine.
On July 29, Ukrainian President Volodymyr Zelenskyy announced new results of strikes on Russian facilities used to support and prolong the war against Ukraine.
