Economy 9 March 2022, 8:29am

Desperate move by Russia: Central bank caps hard currency withdrawal

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The Russian authorities have taken the radical step of effectively closing the currency market for six months in the face of mounting international sanctions.

From Wednesday, only holders of foreign currency deposits will have access to cash, but only up to a limited amount and only in dollars.

IT WILL NOT BE LEGAL AT ALL TO GET CASH in EUROS, for example, IN RUSSIA.

Russia's central bank on Tuesday announced citizens with foreign currency accounts would not be allowed to withdraw more than USD 10,000 until 9 September and said banks could not sell hard currency.

"From March 9 to September 9, 2022, the Bank of Russia establishes the following procedure for issuing funds from foreign currency deposits or accounts of citizens: all customer funds from foreign currency accounts or deposits … the client can withdraw up to 10,000 US dollars in cash, and the rest of the funds — in rubles at the market rate on the day of issue," the statement read.

During the period of this temporary order, the currency will be issued in US dollars, regardless of the currency of the account.

Conversion of other currencies to USD will be at the market rate on the date of issue. Citizens can continue to keep funds in foreign currency deposits or accounts.

All funds are kept and accounted for in the currency in which the account or deposit was opened. Interest on deposits will continue to be charged in the currency in which they were opened.

According to the statement, banks will not be allowed to sell foreign currency to individuals for the next six months, while there will be no restrictions on the exchange of currency for roubles.

It is possible to open new foreign currency accounts and deposits, but for those opened after 8 March, cash withdrawals can only be made in roubles at the market exchange rate on that day.