Bank of Russia cash withdrawals from foreign currency accounts clarified

The Central Bank of Russia allowed credit institutions to issue cash to Russians in rubles from foreign currency accounts and deposits credited since September 9 at each bank’s own rate, excluding the regulator’s rate. This information was published by the Bank of Russia’s press service on its Telegram channel. Beginning at 0:00 Moscow time on September 9, 2022, withdrawals of cash or bank deposits from a foreign currency account were to be carried out in rubles according to the bank’s exchange rate, the regulator stated in its update. For the past six months, the rules have required that the amount of money issued by credit institutions cannot be less than what would be calculated at the Bank of Russia official exchange rate on the day of payment. Before September 8, reports indicated that the Bank of Russia had extended the ban for six months, until March 9, 2023, limiting charges on extracting foreign currency from the accounts and deposits of individuals. The measure had originally been introduced in March 2022 with a validity period through September 9 of the current year. At the beginning of August, reports indicated that the Central Bank of Russia had extended the restrictions on cash withdrawals in foreign currency for another six months, again until March 9, 2023. The policy created a framework in which residents could access ruble cash derived from foreign currency holdings, with the conversion governed by bank-level exchange rates rather than an official rate set by the regulator. These changes were announced through official channels and reflected in the operations of Russian banks as they managed customers’ foreign currency accounts. Analysts noted that such measures influence liquidity management for banks and affect how individuals plan currency holdings and cash usage. The Bank of Russia maintained that the purpose of the restrictions and the conversion mechanism was to stabilize financial activity in the ruble market and to prevent discretionary outflows during periods of exchange rate volatility, a stance echoed in subsequent communications from the central bank. Over time, the institution kept reviewing the policy’s effectiveness, balancing administrative control with market dynamics, while ensuring that retail customers had access to currency-based cash in ruble form when needed. The ongoing dialogue between the regulator and financial institutions emphasized transparency in rate application and the importance of maintaining orderly market conditions for residents who hold foreign currency in accounts and deposits. In this evolving regulatory landscape, the role of banks as intermediaries remained central, with institution-specific exchange rates determining cash disbursements while the central bank continued to monitor macroeconomic indicators and consumer impact. The situation illustrated how currency substitution policies interact with consumer banking products and how regulatory decisions can ripple through household budgeting, savings strategies, and daily cash flows for residents and non-residents with ruble cash needs.