As it scrambles to keep the ruble’s value from plummeting further, Russia’s central bank on Wednesday announced that it is prohibiting citizens from using rubles to buy dollars and other hard currencies for the next six months.
The central bank said it also will limit to $10,000 the amount of U.S. dollars that clients can withdraw from hard-currency accounts at Russian banks. Anyone wanting to withdraw more than that from a hard-currency account will have to take the balance in rubles, said the central bank, which is known as the Bank of Russia.
The measures are designed to prevent Russians from making a run for dollars as the ruble plummets to fresh lows in the wake of Western economic sanctions, which have limited the central bank’s access to its hard currency reserves.
“For regular people, the main impact of these measures is that they are no longer able to buy dollars, which, for everyone save millionaires, is the best financial asset to protect against inflation,” said Konstantin Sonin, a Russian economist at the University of Chicago.
Sergey Aleksashenko, a former top official at Russia’s finance ministry and central bank who now lives in the United States, called the move “incredible foolishness.”
“Apparently, the outflow of foreign currency deposits from Russian banks has exceeded the Bank of Russia’s forecasts and put under question the banks’ ability to meet their obligations,” he said in his Substack newsletter after the news broke.
“The biggest mistake monetary authority may make in Russia is to touch private savings — if there was no bank run until now, it’s going to happen,” he wrote.