“It’s better to have money with you”: Russians began to acquire cash more actively

Analysts assessed the distrust of Russians in banks: troubled times

In January, the volume of cash in circulation in Russia amounted to 16.4 trillion rubles, which is 2.3 trillion more than a year ago, the Central Bank calculated. However, this trend is unlikely to continue in the coming months, analysts say.

Earlier it became known that from January to November 2022, the volume of cash in circulation increased by 11%. On average, during this period, citizens and companies rented 91.6 billion rubles a month against 7.8 billion a year earlier. The main explanation is increased fears of the uncertainty of the situation, absolutely new financial realities.

The dynamics of cashing out varied greatly from month to month. The first surge in the withdrawal of “live” money occurred on February 24: demand jumped to a two-year record – 111.3 billion rubles, and the very next day – to a historical maximum of 1.4 trillion. But in March, the Russians returned almost a trillion rubles to the banks, and by June, the February monetary “panic” was almost completely compensated. In the period from September 21 (the day of the announcement of partial mobilization) to the end of the month, the population and businesses withdrew 866 million rubles in cash, and in October – about a third of this amount.

“In general, the past year made many Russian citizens think about the fact that it is better to have money with you than in a bank or on a salary card,” says private investor Fedor Sidorov. – There were enough shocks – first in February, then in March with an increase in the Central Bank rate from 9.5% immediately to 20%, and then the regulator introduced restrictions on the purchase of cash currency. Autumn was also not without upheavals. However, this model of behavior is not unique to Russian consumers: for example, in Turkey, during a sharp surge in inflation, the population emptied ATMs, the same pattern was observed in Venezuela, when restrictions were imposed on the purchase of goods in one hand.

In troubled times, with unclear prospects and increased risks, people seek to turn their savings into tangible assets. In this case – in paper money, which is more convenient and calmer to keep under the “pillow” or in their wallet. But today the financial situation has generally returned to normal, and it is unlikely that something similar will happen this year. Although some kind of force majeure, fraught with an explosive growth of panic and rush demand for cash, cannot be ruled out, argues financial analyst, candidate of economic sciences Mikhail Belyaev.