Foreign currency deposits plunge in Russia

Savings in non-ruble accounts are at their lowest level in a decade, according to the central bank

Non-ruble savings of Russian households have dropped to their lowest level in more than a decade, according to the country’s central bank.  

The share of foreign currency in savings on Russian private accounts has been declining since last year, and amounted to $63.4 billion at the beginning of October. By early November, the share of such deposits had fallen by a further $3.7 billion, and accounted for just 9.4% of household savings, according to the regulator.   

The level is the lowest since 2012, when households’ non-ruble deposits totaled $69.2 billion, data showed.   

Banking experts have attributed the decline in foreign currency in customers’ balance sheets to the strengthening of the ruble and higher deposit rates.   

“A shift from foreign currencies in deposits is happening partly due to the withdrawal from ‘toxic’ currencies into the ruble, partly due to the transfer to the yuan, and partly due to transfers of currency to accounts and deposits in foreign banks,” said managing director at Gazprombank Private Banking, Egor Suslov.    

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Russia has seen a sharp outflow of foreign currency from bank accounts and deposits since early last year, when transfers to foreign banks surged. Last March, the Bank of Russia placed restrictions on transfers to foreign banks for individuals in order to support the economy by stemming the outflow of capital amid Western sanctions.   

Balances on foreign currency deposits have slumped by almost 40%, or by $36.4 billion, since the start of 2023, data from the central bank showed.

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