Rising Cash Withdrawals in Russia: Fears of a Deposit Freeze Addressed

Amidst a backdrop of economic uncertainty, many Russians are pulling their cash from banks, driven by fears of a potential freeze on deposits. Reports from The Washington Post highlight a rising tide of anxiety that echoes a similar trend observed during previous crises.

Since the fall of 2024, Russians have increasingly preferred to stash their money rather than keep it in banks, and the trend has intensified in 2026. According to Taras Skvortsov, CFO of Sberbank, cash in circulation has surged by over 10% this year, totaling approximately 2.8 trillion rubles. By the end of 2026, this figure could reach as high as 3.8 trillion rubles, a significant amount compared to Moscow's budget for the same year.

The current cash withdrawal rate is reminiscent of the financial panic following the onset of the war and mobilization in 2022. However, experts assert that while the situation is concerning, it is not yet critical. The liquidity shortage faced by banks has spiked from 0.6 trillion rubles to 2.6 trillion rubles since the start of this year, creating a pressing issue for financial institutions.

Liquidity, defined as the cash banks hold for transactions, has diminished as customers continue to withdraw funds. When cash exits the banking system, banks find themselves with reduced capacity to issue loans, a situation that could hinder the government’s ability to manage its budget deficit effectively.

Economist Yevgeny Nadorshin warns that a growing cash supply may signify a shift towards a less visible, underground economy. This trend has ramifications for the overall economic health, potentially leading to a decline in available funds for loans, which could stymie economic growth.

Despite the alarming statistics, experts recommend against panic withdrawals. Russian banks have shown resilience and have mechanisms to address liquidity shortfalls, including transactions with the Central Bank. Although the liquidity deficit has increased, over 68 trillion rubles remain in deposits, and a significant portion of the population—58%—has no savings at all.

While the Central Bank has downplayed the immediate impact of the liquidity deficit on daily operations, analysts caution that the speed and duration of cash outflows are worth monitoring. If the trend continues, it could lead to a more serious decline in deposits, which could, in turn, affect the economy more broadly.

Some economists believe that the current liquidity deficit, while concerning, falls within the Central Bank’s forecast range for 2026, indicating that banks could endure even higher levels. Tatiana Mikhailova, a visiting professor of economics, downplays the likelihood of a deposit freeze, noting that no significant bank run has occurred. Authorities seem to be addressing budgetary issues through monetary influx rather than resorting to extreme measures.

Experts, including Central Bank Deputy Chairman Alexey Zabotkin, have asserted that a deposit freeze is not a feasible option, citing the severe damage it would inflict on public trust in the financial system. The consensus among economists is that while the economy faces significant challenges, drastic measures like freezing deposits are unlikely.

Source: meduza.io