Russian Bank Run Begins as Ruble Plunges to Record Low Amid Escalating Sanctions
A bank run has started in Russia as citizens rush to withdraw cash amid escalating sanctions. The Russian ruble also nosedived to a record low, plunging more than 30%. “There are about 70 people in line. Eyewitnesses say the money in the ATM runs out within 40 minutes.” Russians Rush to Withdraw Cash as Sanctions Intensify
The Russian ruble nosedived 30% to a record low against the U.S. dollar Monday morning, falling as far as 119.50 per dollar from Friday’s close as offshore trading started in the morning during Asia hours. Russia’s biggest lender, Sberbank, which has a listing on the London Stock Exchange, also plunged 75% Monday.
The plunge followed the European Commission announcing Saturday that Western allies will impose restrictive measures on the Russian central bank’s international reserves worth $630 billion. European Commission President Ursula von der Leyen said: We will paralyze the assets of Russia’s central bank. This will freeze its transactions. And it will make it impossible for the central bank to liquidate its assets.
The U.S., European allies, and Canada have agreed to cut off key Russian banks from SWIFT, the interbank messaging system which connects more than 11,000 banks and financial institutions in over 200 countries and territories.
“The military conflict will last longer than Putin expected and the reaction of the West and the global community might be more harmful than he expected too,” Alexandre Moutin, head of investments at SMBC Private Wealth, was quoted by BBC News as saying. He added: A bank run is already ongoing and will most likely intensify in the coming days.
Russia’s central bank, the Bank of Russia, had to increase the amount of money it supplies to ATMs Friday after the demand for cash reached the highest level since March 2020.
Several people have posted images and videos of long lines at ATMs in Russia. One Twitter user shared a video of “a queue for a Tinkoff ATM in the Liga shopping center in Khimki.” He described: There are about 70 people in line. Eyewitnesses say the money in the ATM runs out within 40 minutes.
Russia’s central bank has urged citizens to calm down, stating Sunday that it has “the necessary resources and tools to maintain financial stability and ensure the operational continuity of the financial sector.”
However, people are still lining up to withdraw cash. A St. Petersburg resident told Reuters: “Since Thursday, everyone has been running from ATM to ATM to get cash. Some are lucky, others not so much.”
Another person waiting to withdraw cash at an ATM told Bloomberg, “I’ve stood in lines for an hour, but foreign currency is gone everywhere, just rubles.”
Jeffrey Halley, Asia-based senior market analyst at Oanda, told Reuters: A bank run has already started in Russia over the weekend … and inflation will immediately spike massively, and the Russian banking system is likely to be in trouble. Tags in this story Bank of Russia, Central Bank, rouble, ruble, ruble crash, ruble falls, ruble lowest level, ruble plunges, Russia, russia bank run, russian bank run, russian sanctions, Ukraine
What do you think about the situation in Russia? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. US Inflation Could Be Worse Than Expected, Goldman Sachs Says — Atlanta Fed President Favors 25 BPS Rate Hike ECONOMICS | 3 mins ago Crypto Community Discusses Warfare in Ukraine, Importance of Crypto, and the Future of Bitcoin ECONOMICS | 4 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleTechnical Analysis: LUNA Leads Crypto Rally, ANC Slips Under Bearish Pressure Next articleEbay CEO Talks NFTs and Crypto, Exec Says Company Continues to ‘Evaluate Other Forms of Payments’ Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFarmville Creator Zynga to Launch NFT Games, Says Gaming Firm"s Blockchain Lead
American social game developer Zynga has plans to launch non-fungible token (NFT) games in the near future. Zynga’s vice president of blockchain, Matt Wolf, told the press that the company is looking at the cycle right now and “figuring out ... read more.Topps Plans to Auction Rare 1952 Mickey Mantle NFT Card Minted on Ethereum JPMorgan Predicts Long-Term Bitcoin Price of $150K — Outlines Challenges Ahead US Inflation Jumps to 7.5%, CPI Climbs at Fastest Rate in 40 Years, Citizens See Little Wage Growth RBI: Cryptocurrency Is a Big Threat to Macroeconomic and Financial Stability in India