The Russian ruble plunged more than 30%, a record low. “There are approximately 70 people waiting in line. Eyewitnesses claim that the ATM’s money runs out in 40 minutes.
Russians rush to withdraw cash as sanctions intensify
The Russian ruble fell 30% to a new low against U.S. dollars Monday morning. It was down as much as 119.50 USD from Friday’s close, as offshore trading began in the morning Asia hours. Sberbank, Russia’s largest lender, has been listed on the London Stock Exchange. It also fell 75% Monday.
After the European Commission announced Saturday that Western allies would impose restrictive measures against the Russian central bank’s international reserve of $630 billion, the plunge was triggered by the European Commission. European Commission President Ursula von der Leyen said:
We will freeze the assets of Russia’s central bank. It will also freeze all transactions. It will also make it difficult for the central bank’s to liquidate its assets.
Canada, its European allies and the United States have reached an agreement to block key Russian banks from SWIFT. This interbank messaging system connects over 11,000 banks and financial institutions across more than 200 countries and territories.
BBC News quoted Alexandre Moutin as saying: “The military conflict is going to last longer than Putin anticipated and the reaction from the West and global community might prove more damaging than he expected.” He also said:
Bank runs are already underway and will likely increase in the coming days.
After the highest demand for cash since March 2020, Russia’s central bank, Bank of Russia, had Friday to increase its supply of money to ATMs.
Many people posted videos and images of long lines at Russian ATMs. One Twitter user shared a video showing “a line for a Tinkoff ATM at the Liga shopping centre in Khimki.”
The line is about 70 strong. Eyewitnesses claim that the ATM’s money runs out in 40 minutes.
Russia’s central bank has asked citizens to be calm and stated Sunday that it has the “resources and tools necessary to maintain financial stability and ensure operational continuity of financial sector.”
People are still waiting to withdraw cash. According to Reuters, a St. Petersburg resident said that since Thursday, people have been running from ATMs to ATMs to get cash. Some people are lucky while others are not.
Bloomberg was told by another person who was waiting to withdraw cash from an ATM: “I’ve waited in line for an hour, but foreign currencies are gone everywhere, just rubles.”
Jeffrey Halley, Oanda’s Asia-based senior market analyst, said to Reuters:
Russia has seen a bank run over the weekend. Inflation will spike immediately and the Russian banking system could be in serious trouble.
