Economic indicators show cash in circulation exceeding 18 trillion rubles

Recent figures from the Bank of Russia show that the cash in circulation across the country has surpassed 18 trillion rubles for the first time, signaling a notable shift in the nation’s money dynamics. The regulator reports that cash holdings stood at 18.194 trillion rubles as of August 1, up from 17.797 trillion rubles on July 1. Meanwhile, the broad monetary base reached 25.078 trillion rubles, rising from 24.929 trillion rubles in the prior month, with July alone adding 149 billion rubles to the base. The Bank of Russia notes that the monetary base includes not just cash in public hands but also funds in banks’ correspondent accounts with the central bank, reserve requirements, and deposits of credit institutions with the regulator. This growth in cash supply correlates with rising demand for physical banknotes driven by the current uncertain economic climate, and analysts observe a shift among some residents toward saving in cash forms. In June 2022, the money in circulation also climbed to 17.8 trillion rubles, marking a record increase of 459 billion rubles versus the same month in the prior 25 years. The central bank has acknowledged higher demand for banknotes in recent months. Yet market experts do not anticipate a sharp rise in cash demand in the near term. Over time, funds are expected to move back into the banking system as households and businesses recognize the safety and convenience of keeping money in bank accounts. This pattern aligns with historical observations that cash demand can surge during times of economic stress, though the long-term trend tends to favor deposits and electronic payments. Bank of Russia continues to monitor liquidity conditions and to assess how shifts in consumer behavior, inflation, and interest rates influence the balance between cash and deposits across the financial system. The government and financial institutions stress that while cash remains a legitimate medium of exchange, the ongoing transition toward digital and traceable payment methods is likely to shape cash usage in the years ahead. Local financial professionals emphasize prudent cash management, balanced with the need for liquidity in everyday transactions, amidst evolving consumer preferences and macroeconomic uncertainties. The central bank’s assessments aim to capture the nuanced interplay between cash demand, monetary policy, and the broader resilience of the Russian financial framework.