As the coronacrisis reached Russia this spring, ordinary citizens and business turned to cash to guard against the uncertainties of 2020. By early October, an estimated 12.1 trillion rubles were in circulation. While cash holdings have been on the rise for the better part of the last decade in Russia, the growth rate of cash holdings outside the banking system (a.k.a. M0) quadrupled between March (7.1%) and October (28.3%).

  • The growth in cash holdings during the April-June period was largely COVID-related. Since mid-summer, however, Russian's were likely equally driven to withdraw cash from bank accounts by the weakening of the ruble against the US dollar and growing distrust of the banking system.
  • Russian's were not the only ones turning to cash this year. In Brazil (the world's 8th largest economy), currency in circulation increased by almost 50 percent in August 2020 compared with the same period of the previous year.

 

Definitions:

M0 - cash money in circulation outside the banking system.

M1 - M0 + Transferable Deposits

M2 - M1 + Other Deposits

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