Russian nationals sent more than $30 billion abroad between January and September 2022, according to data from the regulator cited by state-run media outlet RIA Novosti. This represents an all-time high in the history of the statistic compiled by the Bank of Russia.
This huge cash outflow will worsen the situation in the Russian economy, which is already suffering from harsh Western sanctions for Moscow’s war against Ukraine. If it continues, Russia may go bankrupt.
The largest withdrawals of funds
The highest amount of remittances ever received was $6.7 billion in September. Analysts have attributed the increase to President Vladimir Putin’s announcement of his “partial” mobilization and a fresh wave of Russian emigration.
Russian money transfers abroad have significantly increased since the start of the war in Ukraine. About $4.3 billion was taken out of the country in February alone; this amount later sharply decreased, but only as a result of currency restrictions put in place by the central bank. There was a ban on withdrawals of more than $5,000 per month and a ban on cash withdrawals.
The Russian government made an effort to slow down cash outflow
The regulator’s stricter rules temporarily stopped the flow of money out of Russia; in March, only $1.7 billion was transferred by Russian citizens to foreign bank accounts, and in April, that number fell even more to $1.4 billion. However, the funds increased in May, reaching $1.7 billion.
The Central Bank’s easing of its restrictions led to a sharp increase in currency withdrawals; in June, remittances to foreign bank accounts totaled $5.2 billion.
When the Central Bank of Russia opened withdrawals to $1 million per month in July, the amount transferred out each month increased to $5.6 million. Remittances in foreign currency fell to $5.4 billion in August. The regulator still needs to provide data for October.
Russians rely on foreign banks
According to data from the Central Bank, Russians only had $30.6 billion in foreign banks at the start of 2022. Russian citizens have thus more than doubled that sum in less than a year; as of September, there were $63.1 billion in deposits abroad.
The transfers of money not deposited in foreign banks aren’t included in these numbers. They may significantly increase the outflow of personal funds if they are considered.
Will Russia go bankrupt?
With the leakage of finances from the state, Russia may gradually go bankrupt because people are hastily and actively taking money out of the country, and the country’s economy wants to be better. Still, looking at the situation and how the Russian economy is falling, it will be soon.