Financial sanctions against Russia

Financial sanctions against Russia have strangled the profits of its banks and ruined the international operations of many lenders, but how much does it matter to average Russians a year after Moscow sent its troops into Ukraine?

For most who bank in rubles with large retail lenders, such as Sberbank, the answer is: not much. “Nothing has changed for me,” said Vyacheslav Fatikhovich, a taxi driver in the Ural city of Yekaterinburg.

“The only thing is that customers are paying less by card and more often in cash,” he said. Russia’s monetary authority managed to avoid a full-scale run on its banks with capital controls, and the ruble remains in plentiful supply, with long lines at ATMs during the early spring dash for cash now a thing of the past. The thing is.

However, for those who travel abroad, want to transfer money there or hold foreign currencies or securities, life has become more complicated after Russia’s major banks were effectively booted from the SWIFT global payments network. forex dries up

People with foreign currency accounts were only allowed to withdraw $10,000 from their account balances before the March 9 ban. People making hard currency deposits after the cutoff can only withdraw rubles. It’s anyone’s guess how much hard currency is stuck outside the banking system as some rushed to dump the ruble and pull out their hard currency deposits, fearing that the coming sanctions would wipe them out completely. Will cut

A retail employee who spoke on condition of anonymity said that the memory of the mad rush for cash compels him to this day to make sure he has enough cash. “I spent hours in my car driving between banks where people were withdrawing not only dollars, but also roubles,” she said.

The suspension of Russian operations by Visa and Mastercard, the Russian and Chinese lifeline, also meant that their cards issued there ceased to work overseas, leading to Russia’s rush to substitute Mir cards.

Daniil Usikov, a 45-year-old entrepreneur who is based in Belarus and was shocked when the Russian card stopped working, said he didn’t have enough cash to panic. “But the problem had to be resolved and I went to Moscow, opened a Mir card, returned to Belarus and was able to pay for everything again.”

Yet Mir, which means “world” or “peace” in Russian, is facing adversity abroad with some “friendly” countries – which have not sanctioned Russia – such as Turkey restricting access. Is. Former journalist Andrey said China’s UnionPay was his lifeline.

“I quickly opened three UnionPay cards at different Russian banks,” said Andrey, who now works outside Russia. “Plus, I went to Kazakhstan to get a MasterCard there, which has proven invaluable over the past year.” kfc bag

Many Russians who have moved abroad, worried about retribution for their political views or fear of being called up to fight in a conflict, also had to figure out how to get money out of Russia. While some banks are still able to access SWIFT and process cross-border transfers, commissions and fees have increased, prompting people to turn to alternatives such as cryptocurrencies.

For example, users of Binance, the world’s largest crypto exchange, can transfer rubles pegged to the US dollar via the “stablecoin” Tether. Other ways to get cash out of Russia are more adventurous.

A financial services professional who left Moscow shortly after the conflict began and requested anonymity asked a friend to withdraw millions of rubles from his Russian accounts and meet him in person in Moscow. The transaction, based entirely on trust, was completed three hours later when a woman arrived at her hotel room in Dubai with a KFC paper bag containing approximately $50,000.

‘Friendly’ but complicated Thousands of Russians who have come to Dubai found that even though it is a “friendly” destination, opening a bank account was anything but simple, especially without an Emirati ID.

“It is possible, but the verification process takes one to three months, and the result is not always predictable,” said Telegram user, Inna, on a channel for Russians called ‘Hi Dubai’ about opening an account without a local ID. Said. As the West imposed restrictions on transactions with Russia’s central bank and the freezing of some $300 billion in its foreign assets limited its ability to defend the ruble, individuals were also hit by sanctions. The central bank estimated that more than 5 million retail investors in Russia had more than 320 billion rubles ($4.28 billion) in foreign stock holdings.

“We lost our assets after February 24, 2022, and today – the assets are frozen and they are like that,” said investor Svetlana Mavrinskaya. Another investor, Yulia Zykova, said: “Neither the central bank nor the brokers are doing anything in the interests of Russian investors.”

The Bank of Russia says it is working to unblock the assets of retail investors. Yet, for most Russians, such as Fatikhovich, the taxi driver, such concerns are foreign. “I go on holiday to my mother in the countryside, not abroad,” he said. “I’ve certainly seen dollars, but I’ve never had one in my hands.” ($1 = 74.7000 rubles)

(This story has not been edited by DevDiscourse staff and was auto-generated from a syndicated feed.)

Source : Biz Crast net