Russians make mass cash withdrawals amid internet shutdowns

2 hours ago

Russians are withdrawing record amounts of cash due to internet shutdowns disrupting online payments.
Cash withdrawals spiked during holiday periods, with 210.5 billion rubles taken out in early May 2024, five times more than in 2023.
The trend of hoarding cash has persisted for three consecutive months, driven by internet blackouts and fears of tighter payment controls.
Authorities have tested internet blackouts in major cities, affecting banking apps, card readers, and daily services like taxis.
A new bill proposes stricter controls on cash payments, requiring justification for large card receipts to combat illegal activities.
Precautionary savings in Russia have risen to 38% of wealth, significantly higher than in many other countries, potentially hindering economic growth.
The Bank of Russia has revised its liquidity forecasts upward, expecting cash circulation to increase substantially in 2024.
Increased cash demand and currency conversions have widened the structural banking liquidity shortfall.

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