In February, the amount of cash circulating outside the Central Bank of Russia continued its decline, with the Russian press citing regulatory data as the source. TheCentral Bank reported that cash inflows to banks last month reached 24.7 billion rubles, a figure that reflects a broader pattern seen since late 2022. That year marked the first notable shift back toward the banking system as the Bank of Russia raised its key rate, tempering inflation and reshaping savers’ choices.
Excluding December, which traditionally features a seasonal outflow, cash in circulation decreased for the fifth straight month. Notably, January this year recorded an unusually large movement of cash toward banks, totaling more than 500 billion rubles. Analysts interpret this surge as evidence of households and businesses gravitating to bank deposits, a move driven by competitive deposit interest rates that offer a tangible shield against inflationary pressures.
Experts suggest that the sustained preference for bank-held cash equivalents and deposits is a reflection of the higher yields available on bank products compared to other liquid instruments. This dynamic helps explain why cash in public circulation continues to shrink even as the broader financial system remains coupled to monetary policy signals. Yet some observers caution that any gradual easing in the Central Bank’s refinancing rate could alter this trajectory, potentially reducing the attractiveness of bank deposits and prompting a partial reversal in funds flows back into cash holdings or other assets.
There has been longstanding guidance against keeping savings in currencies perceived as less stable, with prominent economists emphasizing the benefits of diversified, locally anchored savings strategies. The central bank’s ongoing discussions about adjusting deposit insurance limits also play a role in shaping household risk perceptions and the way savers allocate funds across different financial instruments. Those contemplating long-term wealth preservation are weighing the balance between liquidity, return, and security as macroeconomic conditions evolve.
In parallel, the bank’s communications have highlighted the importance of prudent financial planning for households and small enterprises. Individuals are encouraged to consider the role of insured deposits and the potential protection offered by government-backed guarantees, alongside a careful assessment of yields, fees, and accessibility. As monetary policy evolves, savers may reassess the relative merits of keeping money in cash, piling into high-yield deposits, or seeking alternatives that align with their risk tolerance and time horizons.
Analysts note that the present cash flow patterns are likely to respond to a combination of domestic inflation trajectories and external economic developments. While high deposit rates have been instrumental in sustaining the appeal of bank deposits, the trajectory of the policy rate, financial stability measures, and the structure of the banking sector will collectively determine whether cash once again becomes a more prominent component of household portfolios or if the current preference for deposits persists. The broader implication is clear: savers are actively balancing safety, liquidity, and expected returns as they navigate a shifting monetary landscape.