Russian Household Bank Deposits Drop 107 Billion Rubles in August
Household funds fell 107 billion rubles in August, the largest monthly outflow since late 2022, according to central bank data.
Key points
- Russian household bank deposits fell by 107 billion rubles in August, the largest drop since late 2022.
- Cash in circulation increased by nearly 3 trillion rubles between February and July this year.
- Annual deposit growth slowed to 9.2% in August, down from over 20% in 2024.
Russian household bank deposits fell by 107 billion rubles in August. This marks the largest monthly outflow since the autumn of 2022. The decline equates to approximately $1.27 billion. Central bank data released in September confirms the trend.
Balances on individual accounts shrank by 0.2% during the month. Officials link the drop to typical summer spending. Families likely used funds for vacations and school preparations. This seasonal pattern contrasts with the same period last year.
Comparison with previous outflows
In August of last year, balances actually grew by 70 billion rubles. The current outflow is the largest since September 2022. That month saw a drop of 458 billion rubles. October 2022 followed with a further loss of 98 billion rubles.
A similar spike occurred in May of this year. Household funds fell by 550 billion rubles in that month. This followed a 1.1 trillion ruble increase in April. People spent salaries and pensions ahead of long holidays in May.
Income growth slows down
Deposits growth slowed to 9.2% annually in August. This is down from over 20% in 2024. Real disposable incomes rose only 1.5% in the first half of the year. Previous years saw growth rates of 8.2% and 7.4%.
Public Opinion Foundation data shows a shift in sentiment. In August, 22% of respondents rated their financial situation as good. Another 22% rated it as bad. A year ago, the ratio favored good conditions at 25% versus 16%.
Cash demand rises sharply
Russians increasingly prefer cash over digital payments. Internet outages disrupt cashless transactions, driving demand for physical money. Cash in circulation grew by nearly 3 trillion rubles from February to July. This equals about $35.69 billion.
August marked the first time since 2022 that cash was named the best savings method. Savings rates also fell as the key policy rate dropped to 14%. This is a one-third reduction from its peak of 21%.
Banks are responding to the outflow by raising savings rates. VTB and Alfa-Bank recently increased their offers. The average maximum deposit rate among top retail banks is rising. Russians still hold 68.5 trillion rubles in bank deposits.
