As the summer break winds down, the impulse for Russians to travel abroad is expected to ease, and with it the surge in foreign exchange purchases on the Moscow Exchange should taper by September 2022. This assessment comes from Vladimir Rozhankovsky, Managing Director of Trade123, in an interview with socialbites.ca.
Rozhankovsky explained that July’s heightened activity in foreign currency purchases on the Moscow Exchange is driven by a seasonal pattern. He noted that the latter half of July and the start of August are traditional travel windows when many Russians plan outbound trips. In September, he predicted, the active buying will slow, and exchange indicators should revert to the levels observed in April and May 2022.
He pointed out that anti‑Russian sanctions have pushed many travelers to use cash for their vacations. With banking cards blocked for many citizens, there is a stronger tendency to purchase currency to support international trips through cash transactions before departures. Rozhankovsky shared a personal example, saying he would be visiting the Philippines for several months and would rely on cash, a choice mirrored by many others in Russia.
On August 11, the Central Bank reported that cash purchases on the Moscow Exchange reached 237 billion rubles, a rise from 176.1 billion rubles, with a peak noted in June. The July figures appeared in the same Central Bank update, highlighting a record level of net purchases by individuals. The Bank’s message indicated that Russians are predominantly buying foreign currency through banks that transfer funds to foreign accounts, underscoring a preference for using formal banking channels despite the broader sanctions environment. [citation: Central Bank release]