Russians took from banks $1,1 billion in cash in April, which is five times less than the March indicator - this indicates certain trends in the economy. Them in an interview FBA “economy today” described by the associate professor of the Department of Economic Security, RANEPA, PhD in Economics Pavel Gribov.
The Central Bank announced the data on the withdrawal by Russians from foreign currency bank accounts in April - depositors removed a total of about $1,1 billion. As of 1 May, the volume of deposits of individuals in foreign currency amounted to $88,2 billion, in a month it decreased by 1,2%. The regulator states: people withdraw currency from deposits for the fourth month in a row, however, a six-year record was recorded in March - they took about $5 billion in just one calendar month.
Then the Russians massively rushed to withdraw funds amid a sharp depreciation of the ruble and panic in the financial markets - the economic crisis coincided with a critical drop in oil prices due to the termination of the OPEC + deal. At first 2020 year, the volume of foreign currency deposits decreased by $8,3 billion, while over the past year, the growth rate was $8,6 billion (from $87,9 billion to $96,5 billion).
“In the analysis of these figures you must constantly remember, what we are talking specifically about foreign currency bank deposits - usually, they are dollar, – Mushroom notes. - In Russia, deposit rates on them are maximum 0,02%, and for the most part they are just zero. It means, what, keeping dollars in banks, our fellow citizens do not receive income from this. And don't lose anything, if you cash these funds in any, in their opinion, right moment.
Given the current dynamics with lending and money circulation in Russia, can say: a significant portion of the currency was withdrawn for psychological reasons. The amount of funds withdrawn overnight is, that there was clearly a panic: people were afraid of losing funds and sought to get their hands on, to spend or hide at home. Partly this money fell into the Russian economy - went to meet the current needs of the owners”.
Part of the currency was reinvested
According to CB statistics, in March, commercial banks imported into the Russian Federation almost $5 billion and about € 1 billion - with these funds they replaced the currency, withdrawn by depositors from deposit accounts. According to Valery Abramov, Doctor of Economics, residents of Russia succumbed to panic, as still fresh memories of “burst” banks, defaulted 1998 years and problems with the withdrawal of foreign currency from accounts in 2014. Every economic crisis provokes similar behavior of Russians.
According to research, quite a large percentage of Russians still do not trust the banking system, preferring to keep savings in cash during difficult economic periods, partially translating them into dollars and euros. However, statistics of recent years show, that more and more Russians are actively investing in securities and playing in the stock markets. And the crisis is not a hindrance.
“In, that Russians massively withdrawed currency from accounts in March and April, nothing really good, – Mushrooms emphasizes. - In addition to losses by banks, assets, this process showed: some Russians lost in income, and was forced to cover them at the expense of savings. We see, that public confidence in banks is still over the past 15 years grew, but it is still not unlimited.
And if you keep money on a bank deposit is pointless in terms of profitability, then the second psychological factor works - you need to withdraw dollars and either spend, either invest profitably. That is what we are observing now, looking at statistics. Banks have no incentive, to convince the depositor to leave the currency in the account. Because they lose this currency”.
The negative trend is refracted
More than a quarter of the outflow of foreign currency deposits from the banking sector in April was provided by Sberbank - to 1 May deposits of individuals in foreign currency in Sberbank decreased in April by $286,3 million. but, paradoxically, the same institution showed the largest influx of ruble deposits – in April rose by 373 billion rubles, to 11,6 trillion. In general, the currency ceased to suit the Russians as a means of treasure.
Overall March-April 11 systemically important banks in Russia ensured the influx of deposits into the system, and other large credit organizations faced an outflow of 0,2%. The outflow of funds from deposits in March, the Central Bank explained the growth of consumer activity. Russians shop in anticipation of restrictions and self-isolation due to the coronavirus pandemic, and also made large deferred purchases, fearing price increases.
“The decrease in the dynamics of currency withdrawal between March and April has already shown five times, that the panic as a whole has passed - that's all, what the Russians wanted to film, they have already cashed and used at their discretion. The banking system does not have to wait for more of these shock effects., if there is no new crisis in the global economy. The situation is gradually stabilizing.
rather, in the future we can expect the opposite effect - the inflow of cash deposits of individuals. The speed of this process will depend on, how will the real disposable income of Russians begin to grow. As well as how quickly and successfully the Russian economy will recover. Take her out of a month and a half “frozen” states will be in the very near future”, – concludes Pavel Gribov.
Max Boot
