Get you up to speed: Russians are pulling billions from banks over fears Putin will raid their savings | News World
Russian citizens have begun withdrawing cash from banks amid fears that Vladimir Putin will use savings to fund the war against Ukraine, with a reported outflow of 56.8 billion roubles on August 12. This has resulted in a significant rise in cash in circulation and has drained banks’ liquidity, prompting the Central Bank of Russia to expand lending.
The Central Bank of Russia has responded to the liquidity crisis by expanding lending in the banking sector amid significant withdrawals by citizens and companies. As of mid-August, Russian banks recorded a cash outflow exceeding 620 billion roubles, reflective of ongoing economic instability and concerns over potential government asset seizures.
Russian Minister of Finance Anton Siluanov dismissed circulating rumours about potential deposit freezes as “fake news,” emphasizing that the government is monitoring the financial situation closely. In response to significant cash withdrawals from banks, the Central Bank of Russia has expanded lending to ensure liquidity in the banking sector amidst ongoing economic instability.
What remains unclear — It is uncertain how much further the crisis will impact the financial stability of Russian banks amid ongoing withdrawals and economic pessimism.
Russians withdraw billions from banks amid concerns over savings raid
Russians are moving to cash over concerns about Putin’s war (Picture: ALEXANDER NEMENOV/AFP via Getty Images)
Russian citizens have reportedly begun to pull money from banks after fears Vladimir Putin will raid savings to pay for the war against Ukraine.
During the first two weeks of August, the country saw the volume of cash in circulation rise by 286.4billion roubles, the equivalent of £2.5billion.
Russian banks have been bleeding cash each day, with the highest outflow of 56.8billion roubles (£491.9million) recorded on August 12.
The month before saw a record outflow, with more than 620billion roubles (£5.4billion) withdrawn from the banking system.
For seven consecutive months, money has been flooding out of the banks, according to central bank data, believed to be due to the ongoing instability.
Analysts suggested economic pessimism and fears that the Kremlin could freeze deposits or impose a cap on withdrawals.
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Russian banks have been bleeding cash each day (Picture: EPA)
Rumours spread across Russian Telegram channels of this potential freezebut Anton Siluanov, the Russian minister of finance, branded the posts ‘fake news’ in a statement.
The cash demand has reportedly drained banks’ rouble liquidity, resulting in the Central Bank of Russia expanding lending in the banking sector.
It’s not just the citizens who are moving money, though, as large companies are said to be moving funds abroad to avoid any potential seizures.
This comes hours after Moscow slammed Britain for supplying drones for long-range strikes inside Russia, warning this makes the UK a participant in the war.
Vladimir Putin’s Foreign Minister Sergei Lavrov lashed out as Prime Minister Andy Burnham stressed that he is 100% behind Ukraine ‘against this illegal war led by Vladimir Putin.’
Burnham added: ‘Britain is providing support so that Ukraine can defend itself, and that’s been the British position all the way through this conflict by previous prime ministers, it remains the case with me.
‘We are not fairweather friends.’
Foreign Minister Lavrov spoke to Russian television and said: ‘This only means one thing. The president [Putin] warned of our right to act in any part of the oceans if someone encroaches on our interests, on our property.
‘We have the same right to view the proudly declared direct participation of British missile forces in strikes against Russia as participation in a war, with all the ensuing consequences.’
Russians are becoming increasingly concerned over the new deep reach of drones and missiles deployed by Ukraine to target strategic targets deep inside the country.
Buildings were also hit today in other Russian cities – Tula, the location of multiple defence plants – and Ufa, a major oil capital.
An oil refinery was hit in Ufa, sparking yet another fire as Russia grapples with critical petrol shortages and long queues.
In Ukraine’s Zaporizhzhia region, two people were killed and ten injured in a Russian guided aerial bomb attack on a residential area.
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