Cash Demand in Russia Linked to New Regions and Ruble Conversion
The central bank has noted a notable rise in cash demand within Russia, spurred by economic activity in recently integrated regions. The DPR, LPR, Zaporozhye, and Kherson regions now rely entirely on rubles for everyday transactions, as the hryvnia ceased to circulate there in 2023. This information comes from a briefing by Alexei Zabotkin, deputy governor of the Bank of Russia, reported by RIA Novosti. (Source: Central Bank of Russia, cited by RIA Novosti)
In April, the Bank records a 3% jump in the amount of cash in circulation, marking a record high of 17.154 trillion rubles. This rise aligns with the broader impact of cash use shifting in the newly incorporated regions, where non-cash payments are still relatively uncommon for practical reasons. Since the start of the year, cash hryvnia has stopped circulating in these areas, and all cash transactions have migrated to ruble cash. (Source: Bank statistics, reported through RIA Novosti)
According to Zabotkin, the heightened cash demand in the new regions appears to drive a broader uptick in cash demand across the national economy. The shift in everyday payment habits in the annexed territories reinforces the overall currency demand, even as non-cash payment adoption remains uneven in some local markets. (Analysis based on central bank commentary)
On September 30, 2022, Russian President Vladimir Putin signed accords formalizing the entry of the DPR, LPR, Zaporozhye, and Kherson regions into the Russian federation. The president stated that residents of these regions became Russian citizens permanently. Referendums held between September 23 and 27 supported integration with Russia. Reports indicate that the votes in these territories favored joining the federation by a substantial margin. (Context: presidential decrees and regional referenda outcomes)