Recently, there has been a notable increase in cash withdrawals in Russia. This trend has continued as many people feel uncertain about their financial situations. They want to have cash available for safety and security, as the economy shows signs of stress. Since Vladimir Putin announced a partial mobilisation in September 2022, many citizens have sought a financial buffer, and this has led to higher cash withdrawals. Another factor is the ongoing conflict in Ukraine, which requires significant government funding. Currently, the Russian government is struggling to collect taxes effectively, which complicates its ability to finance the war.
Many shops, especially small businesses like restaurants and markets, now prefer cash payments. This decision helps them avoid high taxes and keeps more of their income. A woman running a clothing shop in Pskov mentions that her business is one of many facing closure due to insufficient profits. Furthermore, some customers receive cash discounts if they pay with cash, making this method even more appealing. The government is increasingly worried about this trend, as it affects tax revenue while trying to combat illegal work. Reports indicate that cash withdrawals have risen sharply, leading many people to keep money at home for security, despite the high-interest rates offered by banks. This situation creates a significant challenge for the economy, which is already facing a slowdown and a widening budget deficit.