The latter were aimed at both preventing the withdrawal (and physical export) of hard currency and making it as unattractive as possible to keep it at Russian banks. The accrual of interest on FX deposits – even the smallest – was canceled; instead, a fee for holding currency was introduced. Most currency operations became unavailable, with devastating commissions put in place for other transactions.
Before, even a simple currency exchange was included in the capital outflow statistics (you bought dollars or euros with part of your salary in the Sberbank or VTB mobile app and kept them on your account at that bank – this would be an outflow), but now, for the most part, it is money that has physically left the country. And in different ways. One of the legal ways is to open an account in a “friendly” country (Georgia, Armenia, Kazakhstan, Uzbekistan, Tajikistan or even Turkey) and transfer even just rubles there. Then convert them into the local currency at the rate set by the bank.
The dynamics of such operations over the past year is very telling. On February 13, the Central Bank put out fresh data
that showed that from February to December 2022, Russians transferred RUB 4 trillion to their accounts in foreign banks, or approximately $ 60-65 billion. A more precise dollar amount is hard to get at due to volatility in the dollar exchange rate, which in 2022 fluctuated in Russia from RUB 50 to RUB 180 (financial stability!), while daily swings during the most stressful periods were too big.
The figures are broken down by month, starting in 2018. Before the war, the monthly outflow did not exceed RUB 50 billion in a month. The pre-war record of RUB 51 billion was set back in May 2021, when, in the wake of pandemic-related travel bans, Russians rushed out of the country as soon as they could. The rest of the period, the monthly figure fluctuated from RUB 20 billion to RUB 40 billion. January 2022, the last full month before the war, was no exception, at about RUB 34 billion.
In February 2022, almost RUB 332 billion was transferred into accounts at nonresident banks. It was people who managed to take advantage of the shock that took hold of the Central Bank following the outbreak of hostilities. The restrictions were put in place only in March, and before the introduction of international sanctions against the financial sector. From March to May, the outflows declined, though they never dropped below RUB 100 billion a month. In June, the ruble bounced back strongly against the dollar thanks to a dramatic drop in imports, high prices for Russian commodities and the restrictions on the Russian FX market. The official dollar exchange rate fell to RUB 50. The budget of the state and Russian commodity exporters started to show cracks. Back in May, the Central Bank loosened the reins somewhat, quintupling the monthly limit for transferring funds to own accounts at foreign banks.
In the meantime, Russians realized that Putin’s blitzkrieg was not working. The result was that a new surge in private outflows from Russia followed in June that reached RUB 293 billion. In September, amid the so-called partial mobilization, transfers to accounts at foreign banks exceeded RUB 500 billion. The high mark for the year came in November at RUB 561.5 billion.
Money flowed out of the country not only to accounts at foreign banks. Part of it was simply taken out in cash by emigrants. In a 2023 interview
, Andrei Kostin, the head of Russia’s second-largest state-owned bank VTB, said that in the first two weeks after the start of the war, VTB clients took out $ 26 billion of hard currency in cash. It is safe to say that at Sberbank, Alfa Bank and Tinkoff Bank, the figures were similar. That currency has not come back to banks either (at least not Russian banks).
There is another channel through which people who left the country withdraw their money – cryptocurrencies.