Russia is covered by the “dollar tsunami”
Since the beginning of 2018, banks in Russia have recorded a record by previous standards inflow of deposits in foreign currency. In January 2018 alone, foreign currency deposits increased from 5,74 trillion rubles. up to 6,32 trillion rubles. - 600 billion rubles. Prior to this, deposits in foreign currency in Russian banks were reduced, since most wealthy Russians preferred to keep their dollars and euros in foreign banks.
What are the reasons for such changes? The answer lies on the surface. On March 1, 2018, an amnesty of capital begins in Russia. In the period from March 1, 2018 to February 28, 2019, Russian citizens will be able to declare their foreign property and avoid administrative, tax, and even criminal liability. For many wealthy people, this is a good opportunity to legalize the funds that they had previously carefully collected in foreign banks, and for Russian credit organizations to replenish their financial reserves.
Of course, it is unlikely that the amnesty of capital will fully lead to the results that the government expects from it. Indeed, not all wealthy Russians will agree to the full legalization of their capital, especially since it is very risky to conduct business and keep large capital in Russia. But the positive consequences for the Russian economics still obvious. After all, the money returned to Russian banks, of course, will not just be in the banks, but will be involved in a wide variety of investment projects. Until recently, it was the lack of money that acted as one of the key obstacles to the development of the Russian economy, especially after Western banks almost stopped giving loans to Russian business.
There is another possible reason for the rapid return of capital. In January 2018, the U.S. Treasury Department published the Kremlin Report, listing 210 people. These are 114 senior officials and 96 large businessmen whom the American intelligence services consider to be Vladimir Putin’s entourage. For these people, restrictions on working with American and European banks may be introduced.
Since the US Treasury is promising to expand the list, it is not known which of the officials or businessmen will fall into its updated version. Therefore, many entrepreneurs and officials, as well as their relatives, could begin the process of withdrawing money from European and American banks to Russia. At least, there will be a guarantee that they will not lose their money after a possible seizure of accounts with foreign banks. Toughening requirements for public servants who can no longer hold accounts in foreign banks also played a role.
Finally, do not forget about the current improvement in the economic situation in the country. At present, inflation in Russia has noticeably decreased, the ruble has stabilized, a gradual increase in economic indicators is observed, which also plays in favor of the return of capital from abroad.
Already in January 2018, the inflow of money to Russian foreign currency deposits was three times higher than last year. This is a very interesting trend. Basically, money is transferred from banks in the UK, Switzerland and Austria. It can be expected that in addition to increasing foreign currency deposits, money withdrawn from Europe and the USA will actively declare themselves in the stock market. Not all wealthy currency holders will be limited to deposits, many will invest their funds in securities.
What are the reasons for such changes? The answer lies on the surface. On March 1, 2018, an amnesty of capital begins in Russia. In the period from March 1, 2018 to February 28, 2019, Russian citizens will be able to declare their foreign property and avoid administrative, tax, and even criminal liability. For many wealthy people, this is a good opportunity to legalize the funds that they had previously carefully collected in foreign banks, and for Russian credit organizations to replenish their financial reserves.
Of course, it is unlikely that the amnesty of capital will fully lead to the results that the government expects from it. Indeed, not all wealthy Russians will agree to the full legalization of their capital, especially since it is very risky to conduct business and keep large capital in Russia. But the positive consequences for the Russian economics still obvious. After all, the money returned to Russian banks, of course, will not just be in the banks, but will be involved in a wide variety of investment projects. Until recently, it was the lack of money that acted as one of the key obstacles to the development of the Russian economy, especially after Western banks almost stopped giving loans to Russian business.
There is another possible reason for the rapid return of capital. In January 2018, the U.S. Treasury Department published the Kremlin Report, listing 210 people. These are 114 senior officials and 96 large businessmen whom the American intelligence services consider to be Vladimir Putin’s entourage. For these people, restrictions on working with American and European banks may be introduced.
Since the US Treasury is promising to expand the list, it is not known which of the officials or businessmen will fall into its updated version. Therefore, many entrepreneurs and officials, as well as their relatives, could begin the process of withdrawing money from European and American banks to Russia. At least, there will be a guarantee that they will not lose their money after a possible seizure of accounts with foreign banks. Toughening requirements for public servants who can no longer hold accounts in foreign banks also played a role.
Finally, do not forget about the current improvement in the economic situation in the country. At present, inflation in Russia has noticeably decreased, the ruble has stabilized, a gradual increase in economic indicators is observed, which also plays in favor of the return of capital from abroad.
Already in January 2018, the inflow of money to Russian foreign currency deposits was three times higher than last year. This is a very interesting trend. Basically, money is transferred from banks in the UK, Switzerland and Austria. It can be expected that in addition to increasing foreign currency deposits, money withdrawn from Europe and the USA will actively declare themselves in the stock market. Not all wealthy currency holders will be limited to deposits, many will invest their funds in securities.
Information