By the beginning of 2024, Russians had 0.4% or $410 million less in cash foreign currency on hand than a year earlier. This slight decrease is the first since such data has been published since 2018. In 2022, the volume of cash currency increased by $12.05 billion, and in 2021 the increase was only 410 million.
Since April 2023, the volume of cash currency held by the population began to decrease and by September had already decreased by almost $2.5 billion. Citizens actively sold currency when the ruble devalued (the dollar reached 100 rubles), and then began to buy it in large volumes when the rate stabilized. In November, the volume of currency among the population increased by 1.47 billion, and in December by another 550 million, writes ridus.ru.
Economist at the investment company Renaissance Capital Sofya Donets believes that the amount of foreign currency held by the population is declining due to the fact that such assets have become less accessible. Restrictions were eased slightly, but currency transactions became more complex and less predictable. Thus, the new cash currency does not actually appear in the system.
However, the expert notes that so far there is no sharp change in the trend and a continuation of the compression in 2024. The share of cash currency in total savings of Russians at the end of 2023 was about 35%, which is below the peak of 2023 (36%) and historical highs of 2022 (38%), but still above the long-term average (33%).
Director for Analysis of Financial Markets and Macroeconomics at Alfa Capital Management Company Vladimir Bragin believes that storing funds in cash is a habit that will need to be gradually abandoned, especially in the current conditions. Foreign exchange transactions have become more complicated, the import of dollars and euros into Russia is limited, and the demand for currency for traveling abroad is also limited. The analyst advises instead to invest in real assets such as company shares, private equity instruments and real estate. Although deposits and bonds can bring good income in certain periods of time, they are not an eternal source of profit.
Source: Rosbalt
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