MOSCOW/LONDON, Feb 28 (NNN-AGENCIES) — Russians waited in long queues outside ATMs on Sunday, worried that new Western sanctions over Moscow’s invasion of Ukraine will trigger cash shortages and disrupt payments.
Moves to block some Russian banks from the SWIFT global payments system and freeze the Bank of Russia’s reserves are expected to deal a severe economic blow, although Russian authorities and lenders sought to assuage fears.
“Since Thursday, everyone has been running from ATM to ATM to get cash. Some are lucky, others not so much,” St Petersburg resident, Pyotr, who declined to give his last name, said.
Russians waited in long lines amid concerns bank cards may cease to function, or that banks would limit cash withdrawals.
While the SWIFT move will hinder Russian banks from communicating with international peers, analysts say limiting the use of more than US$630 billion in international reserves could prove even costlier for Russia.
Sergey Aleksashenko, a former deputy chairman of the Russian central bank who now lives in the United States, said that Russia’s national wealth fund would effectively disappear.
“(President Vladimir) Putin and (former Finance Minister Alexei) Kudrin built it up for years, thinking about a major war,” he said. “War has come, and there is no money.”
Russian banks sought on Sunday to calm fears over money supplies and online payment systems.
Meanwhile, rates offered for foreign exchange shot up. The rouble closed on Friday at 83 to the dollar, but some lenders were offering rates of above 100 on Sunday.
Russia’s biggest lender, Sberbank, said it was not seeing any interruptions in customer transactions through its own and partner payment systems. State development bank VEB said external restrictions would not stop it supporting projects within Russia.
Otkritie, bailed out by the central bank in 2017, said new restrictions would not have a significant impact beyond use of its bank cards abroad.
The central bank, however, advised people to carry their bank cards with them, saying that mobile payment systems may not work at all with terminals or online shops operated by one of the five banks under the harshest sanctions.
Moscow resident Sergei said he would need to order a new card and remember how to live as he had five years previously when he stopped using cash.
“I’m used to living in the 21st century, without carrying plastic cards around. Everything is installed on my smartphone,” he said. “I’m definitely against it.” — NNN-AGENCIES
