Putin’s ruble meltdown: Russians outraged as ATMs run out of cash –central bank faces fury

Russia’s central bank revealed it had received 94.9 thousand complaints in the first three months of the year, which it said was 38.1 percent more than in the same period in 2021. The bank said one of the main reasons for the growth had been the impact of sanctions and uncertainty following the bank’s emergency measures. In a statement it explained: “A significant part of the appeals was caused by the need to clarify measures to support the population and businesses, the temporary procedure for cash transactions, the suspension of trading on the stock exchange, the operation of payment cards in conditions of restrictions, and so on.” After Russia invaded Ukraine its economy was hit by considerable sanctions including having vast amounts of the central bank’s foreign currency reserves frozen and many of its financial institutions cut off from the financial messaging system SWIFT.

In the immediate aftermath the ruble plummeted in value with scenes of Russians queuing at ATMs and currency exchanges to withdraw and convert rubles.

In response the central bank was forced to carry out emergency measures with a hike in interest rates to 20 percent and restrictions on access to foreign currency.

Such measures have however prompted significant frustration among bank customers.

The Bank of Russia said: “Among the most common sanctioned topics of appeals against banks are the refusal to issue funds from a foreign currency deposit or from a bank account, as well as the lack of cash in ATMs.”

While the bank has seen rising complaints, its Governor Elvira Nabiullina appears to still have the firm backing of President Putin.

Widely seen as a competent and safe pair of hands, Ms Nabiullina was previously tasked with managing the ruble in the aftermath of sanctions following Russia’s annexation of Crimea in 2014.

In 2017 she was named Central Banker of the Year, Europe by British Magazine The Banker.

Since the invasion of Ukraine she has reportedly offered to resign on several occasions but has been turned down by Putin who has instead nominated her for another term.

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In recent weeks the central bank has been increasingly reversing many of its emergency measures with interest rates cut down to 14 percent and relaxing of many of its currency controls.

Despite a currently stable ruble though Russia still faces significant challenges to its economy having only narrowly avoided sovereign default this week.

Global sanctions still leave the country struggling to access and process many of its foreign currency reserves leaving it struggling to make payments on debts.

The block on processing sanctioned money has also hit the corporate sector with a number of major firms such as state-owned rail operator Russian Railways being pushed into default.

Russia will face a major test later this month when a current US Treasury licence enabling it to pay foreign creditors expires on 25 May, with euro and dollar bond payments due two days later.

Meanwhile the country faced its toughest round of EU sanctions this week with its largest lender Sberbank being cut off from SWIFT, as well as a commitment to phase out crude oil imports over the next six months.