Page 98 - RusRPTJul23

day before amid the advance of the Wagner column towards Moscow. The minimum exchange rate is seen at Sberbank, where the dollar is sold for 89 rubles, while the euro for 95 rubles. However, rates at Raiffeisenbank are still relatively high – 92 rubles per dollar and 98 rubles per euro. Banks have lowered the rates by an average of 1 to 5 rubles per currency. That said, Sberbank stated that they did not notice any excessive demand, while 90% of the transactions were the sale of foreign currency.
● In dollar terms, some $10.1 billion worth of Russia’s net exports were denominated in euros in January 2022. By the start of 2023 that was down to just $0.9 billion and by the end of the first quarter had turned negative, with the euro accounting for minus $0.7 billion of Russia’s net exports.
● The dollar’s decline is less dramatic but follows the same trend — from $14.4 billion in January 2022 to $4.6 billion by the end of Q1.
● The ruble quickly jumped to take up a significant share of Russia’s net exports — from a negligible or negative monthly contribution before the war to $5.5 billion in dollar terms by May 2022. It has since floated around the $6-billion mark, sometimes climbing close to $9 billion.
● These currency trends are playing out as the overall value of Russia’s exports declines. From February 2022 to March 2023, with oil and gas prices falling, exports had dropped 24% to $38 billion, the central bank highlighted — a trend which also increases the share of the ruble in foreign trade.
But at the same time, trust in the Russian currency among Russians themselves appears to be falling. A survey by state pollsters VTsIOM in October found 64% of Russians wanted to hold their savings in rubles, 10% in the Chinese yuan, 8% in dollars and 3% in euros. At first glance, this looks impressive — but it can hardly be seen as an overwhelming victory for the ruble. The total proportion of those wishing to hold savings in dollars or euros in 2019-20, before the war, hovered between 8-14%. Before the coronavirus pandemic, just 1% of savers were interested in “alternative currencies,” and now one in ten is willing to hold savings in yuan, rather than the ruble.
According to the central bank, in 2022 and the first quarter of 2023, Russian citizens withdrew 3.1 trillion rubles’ worth of foreign currency. But again, this figure is not an indication of growing trust in the ruble — over the same period, 2.6 trillion rubles’ worth of foreign currency was transferred to accounts in foreign banks and another 1.9 trillion was kept as “cash in hand.” Put simply, the funds withdrawn from Russian banks were not converted into rubles but instead transferred abroad or held as cash, with those amounts actually one-and-a-half times more than the total that was withdrawn. Altogether since the start of the war, Russians’ savings in foreign banks have more than doubled to 5.4 trillion rubles ($67.3 billion) as of April 2023, and the monthly flow of funds to foreign accounts is running at more than five times pre-war levels.
98 RUSSIA Country Report July 2023 www.intellinews.com