Demand for cash soared: whether to wait for restrictions on withdrawals

“The situation is not dangerous”

Demand for cash in the Voronezh, Rostov and Lipetsk regions soared by 80%. This was stated by Deputy Prime Minister of Russia Andrey Belousov. The volume of cash in circulation in Russia on the evening of June 23 increased by 105.3 billion rubles amid a tense information background, the Central Bank said. Meanwhile, according to Belousov, an emergency situation was avoided thanks to the “reinforcement” of banks with cash. What is the danger of such excitement? Is there a shortage of cash and can the authorities impose restrictions on cash withdrawals? Experts told about this “MK”.

Ivan Samoilenko, managing partner of the B&C Agency: “Such a sharp surge in demand for cash and foreign currency (which has more than doubled, the dollar was sold at 150-200 rubles in banks) is a short-term phenomenon, therefore, there are no serious consequences for either the country’s financial system or for the economy will not bear. The reasons for this excitement are obvious, but even today banks do not record a high demand for cash, and exchange rates have returned to the values ​​of the end of last week.

Such behavior of citizens is a psychological reaction of people to possible difficulties in the economy, actions in response to significant events in the country. The demand for cash currency grew sharply in February and March 2022, last fall – this is how people reacted to what was happening. Now it is clear that there is enough cash in the banks, so that the financial system has coped with the increased demand and has a large margin of safety. And for sure, there will be no restrictions on cash withdrawals or on the purchase of foreign currency.”

Alexander Bakhtin, investment strategist at BCS Mir Investments: “The increase in demand for the currency was due to the tense information background of the weekend. At the same time, this demand is difficult to characterize as a rush. Russians have become more financially savvy in recent years, and most know that buying dollars and euros when they are at their peak is a deliberately wrong tactic. We see that the situation on the foreign exchange market is returning to normal, and with it, the rates in banks and on the stock exchange. We believe that the current situation does not pose a threat to the banking system and will not require any special response from the financial authorities.”

Andrey Loboda, Economist, Communications Director at BitRiver: “The outburst of the population’s demand for cash was very short-lived and not so bright. According to my observations, calm was observed in Moscow at all. It is gratifying to note that the colonial dependence of Russians on the euro and the dollar has noticeably decreased, and there were no queues in the exchange offices. That is why the surged demand these days for the Russian currency, and not foreign, can be considered partly a good sign. During difficult hours for the country, citizens thought about rubles, and not about toxic currencies. In the meantime, you can’t stock up on cash for everyone. Most likely, the monetary authorities should think about the fact that in the summer season in the resort and south-western regions of the country, the cash reserve of credit institutions has grown to 5-10% of the level of equity capital.