Central Bank: the volume of foreign currency deposits of Russians abroad exceeded their size in Russia

In prepared (.pdf) The Central Bank Review of the Russian financial sector reports that by the end of 2022, the volume of foreign currency deposits of Russians abroad exceeded their size within the country. This happened against the backdrop of sanctions, the introduction of fees for foreign currency accounts and the promotion of devaluation.

The regulator writes that in 2022, “to a large extent, the accumulation of foreign currency assets of residents has moved abroad.” “The volume of deposits of the population in foreign currency abroad has grown significantly and at the end of the year exceeded the volume of foreign currency deposits in Russian banks,” the document says.

The Central Bank clarifies that not all of these funds are savings – in particular, they could be used for purchases of parallel imports. In addition, Russians could use part of the funds in foreign accounts “to cover their vital needs.” “The valuation of the population’s savings has decreased, even if the volume of accumulated deposits abroad and other investments of the population in foreign currency are included in the savings of the population,” the report says.

According to the Central Bank, in the structure of foreign exchange savings of Russians within the country, there has been a restructuring towards the currencies of friendly countries, primarily the yuan. “First of all, this was facilitated by the fears of clients due to the blocking of funds … However, despite the decline, the share of deposits in US dollars and euros remains significant and still significantly exceeds the share of the yuan,” the regulator added.

As the Central Bank reported, only in the first six months of 2022, Russians translated on deposits abroad more than 1 trillion rubles. Regulator thinksthat it is more profitable to make transfers in rubles or in the currency of friendly countries. Analytical credit rating agency predictedthat in 2023 the share of foreign currency deposits of Russians will be on average at the level of 10% of the total.

About how banks and the public are learning to do without dollars and euros, read the material “Kommersant” “Detox Savings”.