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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

Saturday, Dec. 27


Indulge cultural and material needs simultaneously during the free classical music concert at the Galeria shopping mall in the heart of the city. Starting at 7 p.m., shoppers and mallwalkers will be able to hear the sounds of Tchaikovsky and Strauss softly lilt over the constant buzz of people bustling from store to store, trying to get their shopping done before New Year.



Sunday, Dec. 28


Prepare for the holidays at the Russian Winter New Year’s Fair on Moskovskaya Ploshchad, which concludes today after starting on Dec. 22. Games and attractions as well as numerous performances will be on offer for those looking to get into the spirit while numerous vendors will help make sure you have something for everyone on your list.



Monday, Dec. 29


Learn how the Swedes observe Christmas, or Jul, in their land of ice and snow, during aSwedish Christmas celebration at the Lermontov Children’s Library this afternoon at 4 p.m. Activities explaining and demonstrating Sweden’s cultural traditions will be accompanied by traditional dishes and sweets.



Tuesday, Dec. 30


Today is the final day of the Christmas Market at the Europolis shopping center on Polyustrovsky prospekt. Indulge your holiday sweet tooth by tucking into some gingerbread men, or attend one of the master classes that will teach you about how to make beautiful, festive decorations for your tree using only your hands.



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