The regulator reports that the Central Bank has extended the restrictions on withdrawals from foreign currency accounts for another six months. All existing limits on the issuance of foreign cash to citizens and legal entities remain in effect.
According to the Central Bank, if a foreign currency account or deposit was opened before March 9, 2022, an individual who has not yet utilized this option may withdraw up to 10,000 dollars or the equivalent in euros as of the specified date. Funds remaining after withdrawal can be received in rubles at the bank’s current exchange rate. The same rule applies to incoming foreign currency transfers, which will continue to be issued in rubles.
The extended regime aligns with sanctions imposed on Russia following the start of special operations in Ukraine. The Bank of Russia notes that cash currency restrictions persist due to sanctions that prevent local financial institutions from accepting cash from Western countries.
The regulator also extended the prohibition on banks collecting commissions when issuing foreign currency until September 9. This extension had been anticipated after the head of the Central Bank, Elvira Nabiullina, announced it on February 16 while speaking at the Ural forum focused on cybersecurity in finance. Officials stated that a systemic liberalization of currency controls is not expected in the near term, emphasizing that maintaining these limits is important for financial stability.
Earlier communications indicated the policy was not expected to shift significantly. Nabiullina later remarked that there are no plans to ban the circulation of dollars and euros in Russia and that these currencies would remain in circulation even in a worst-case scenario.
Foreign demand and output
Since February 2022, Russians have increasingly received dollars and euros through banks. The Central Bank reported that in the first half of 2022 individuals purchased 230.1 billion rubles worth of dollars and euros on the stock exchange and in over-the-counter markets, while net foreign exchange sales occurred from February 24 to April 10, totaling 539.9 billion rubles. In the period from September 20 to October 13, net foreign exchange sales by the population reached 65 billion rubles.
Calculations by the Central Bank and RBC indicate that in June 2022 Russians deposited 266.1 billion rubles into foreign bank accounts and deposits, based on an average exchange rate of 57.2 rubles per dollar. In dollar terms, this equates to 4.7 billion dollars, a record high since 2018 when the statistics series began. As of July 1, Russian households held 2.29 trillion rubles in foreign banks, or about 44.7 billion dollars at the prevailing exchange rate.
Sanctions
On March 2, 2022, the European Union banned the sale and distribution of euro banknotes to Russia in response to the special operation in Ukraine. The ban prohibited the sale, supply, transfer, or export of euro-denominated notes to Russia or to any entity within Russia, including the Russian government and the Central Bank, with exemptions only for personal use by tourists or for diplomatic missions.
On March 9, amid high demand for cash and tightening Western sanctions, the Central Bank introduced existing restrictions and limits. On March 10, the measure was extended to businesses. On March 11, U.S. President Joe Biden signed an order banning the export, re-export, sale, and supply of dollar bills to Russia. On April 11, authorities allowed cash withdrawals in euros for citizens who had opened foreign currency accounts or deposits before March 9, 2022 and who had not yet reached the specified cash withdrawal limit. On April 18, banks were permitted to sell cash to residents, with the caveat that after April 9, 2022, banks would only be able to sell currency from their own vaults.”