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Russian Demand for Dollars Soars Amid Ukraine Crisis

Published: May 12, 2014 (Issue # 1809)



  • Purchases of foreign currency increased 27 percent from February to a total of $7.4 billion.
    Photo: Evgeny Razumny / For Vedomosti

Consumer desire for dollars and euros soared in March this year amid Russia's annexation of Crimea and escalating political and economic tensions with the West.

Demand for foreign cash grew almost 1.5 times from February to March, reaching $14.3 billion, the highest level since January 2009, according to a report published by the Central Bank. This number incorporates purchases of foreign currency in authorized banks, currency conversions and cash taken out of foreign currency accounts.

The report associates this spike in demand with "the continuing depreciation of the ruble against the primary global currencies and uncertain expectations as to its further movement."

The majority — 66 percent — of this growth was driven by a wave in cash withdrawals from foreign currency bank accounts. Altogether, individuals withdrew $6.9 billion in dollars and euros in March, an 82 percent increase from February and the highest volume ever recorded by the Central Bank.

Purchases of foreign currency also rose, if less rapidly, with total volume of purchases increasing 27 percent from February to a total of $7.4 billion.

Demand for dollars rose 48 percent from February to $8.8 billion while demand for euros rose 50 percent to $5.3 billion.

Net demand for dollars and euros, or total demand minus the sum of euros and dollars consumers put back into the banking system, grew 2.3 times from February to March, reaching $6.8 billion.

Russian banks responded to escalating demand by hiking up imports of foreign cash from $3.2 billion in February to $15 billion in March.





 


ALL ABOUT TOWN

Friday, Oct. 24


SPIBA’s ongoing “Breakfast with the Director” series continues today, featuring Tomas Hajek, Managing Director of the Northwest Division at Danone Russia. Hajek will be discussing collaborations between businesses from different cultures. The meeting is at 9 a.m. at the Domina Prestige St. Petersburg hotel and all who wish to attend must confirm their participation by Oct. 23.


Get your gong on at “Sounds of the Universe,” a concert at the city planetarium this evening incorporating six different gongs to create relaxing songs that will transport you upwards into the stratosphere. Tickets are 700 rubles ($17).



Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop culture, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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