Russians hoard money following banking sanctions
In Moscow and other Russian cities, people are trying to get cash, both in rubles and dollars, for fear of a tax crash following the invasion of Ukraine, writes the Financial Times.
There were long lines of people trying to withdraw foreign currency as soon as news of the invasion spread, and some banks ran out of US dollars Thursday midday.
President Vladimir Putin’s decision to invade Ukraine on Thursday sent the ruble plummeting to historic lows.
Over the weekend, EU countries agreed on measures to prevent Russia’s central bank from using its currency reserves and to cut off some lenders from the SWIFT global payment system.
On Sunday, the central bank said it would continuously provide banks with liquidity in rubles, with no limits on the amounts banks demand.
The bank said it would also expand its “Lombard list”, which includes securities it will accept as collateral to help banks refinance themselves.
“The Russian banking system is stable, has sufficient capital and liquidity reserves to operate uninterrupted in all situations. All customer funds are secure and available at all times,” the central bank said in a statement.
Read more: US allies escalate financial war on Putin, freeze Russian central bank foreign exchange reserves
PYMNTS wrote on Saturday that reports of Russian military action have spawned a “financial war” of economic sanctions.
There was a joint statement from the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States condemning Putin’s “war of choice” which also describes other restrictive economic measures, such as the freezing of approximately $630 billion in foreign reserve assets. of the Central Bank of Russia held abroad.
The weekend’s action also included blocking some Russian banks and wealthy individuals from accessing the SWIFT global payment and messaging network.
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