A bank run has begun in Russia as citizens rush to withdraw cash amid mounting sanctions. The Russian ruble also fell to a record low, falling more than 30%. “Around 70 people are in line. Eyewitnesses say that money in ATMs runs out within 40 minutes.
Russians rush to withdraw cash as sanctions intensify
The Russian ruble fell 30% to a record low against the US dollar on Monday, falling to 119.50 per dollar from Friday’s close, as early morning offshore trading resumed during Asia hours. Russia’s biggest lender, Sberbank, which has a listing on the London Stock Exchange, also fell 75% on Monday.
The European Commission announced on Saturday that Western allies would impose restrictive measures on the Russian central bank’s $630 billion in international reserves. European Commission President Ursula von der Leyen said:
We will cripple the assets of Russia’s central bank. This will stop his transaction. And it would make it impossible for the central bank to liquidate its assets.
The US, European allies and Canada have agreed to cut major Russian banks from SWIFT, the interbank messaging system that connects more than 11,000 banks and financial institutions in more than 200 countries and territories.
“The military conflict will last longer than Putin expected, and the response from the West and the global community could be more damaging than they expected,” Alexandre Moutin, head of investment at SMBC Private Wealth, told BBC News. she added:
A bank run is already underway and is likely to intensify in the coming days.
Russia’s central bank, the Bank of Russia, on Friday had to increase ATM supplies after cash demand hit its highest level since March 2020.
Several people have posted pictures and videos of long lines at ATMs in Russia. a twitter user share A video of “A queue for a Tinkoff ATM at the Liga shopping center in Khimki”. he told:
About 70 people are in line. Witnesses say that within 40 minutes the ATM runs out of money.
Russia’s central bank on Sunday urged citizens to remain calm, saying it has the “resources and tools necessary to maintain financial stability and ensure the operational continuity of the financial sector.”
Despite this, people are queuing up to withdraw cash. A St. Petersburg resident told Reuters: “Since Thursday, everyone has been running from ATM to ATM to get cash. Some are lucky, others not so much.”
“I’ve been standing in line for an hour, but the foreign currency has gone everywhere, just the ruble,” another person waiting to withdraw cash from an ATM told Bloomberg.
Jeffrey Haley, Asia-based senior market analyst at OANDA, told Reuters:
A bank run has already begun in Russia over the weekend… and inflation will immediately rise massively, and the Russian banking system could be in trouble.
What do you think about the situation in Russia? Let us know in the comments section below.
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