A bank run has started in Russia as citizens rush to withdraw cash amid escalating sanctions. The Russian ruble also nosedived to a record low, plunging more than 30%. “There are about 70 people in line. Eyewitnesses say the money in the ATM runs out within 40 minutes.”

Russians Rush to Withdraw Cash as Sanctions Intensify

The Russian ruble nosedived 30% to a record low against the U.S. dollar Monday morning, falling as far as 119.50 per dollar from Friday’s close as offshore trading started in the morning during Asia hours. Russia’s biggest lender, Sberbank, which has a listing on the London Stock Exchange, also plunged 75% Monday.

The plunge followed the European Commission announcing Saturday that Western allies will impose restrictive measures on the Russian central bank’s international reserves worth $630 billion. European Commission President Ursula von der Leyen said:

We will paralyze the assets of Russia’s central bank. This will freeze its transactions. And it will make it impossible for the central bank to liquidate its assets.

The U.S., European allies, and Canada have agreed to cut off key Russian banks from SWIFT, the interbank messaging system which connects more than 11,000 banks and financial institutions in over 200 countries and territories.

“The military conflict will last longer than Putin expected and the reaction of the West and the global community might be more harmful than he expected too,” Alexandre Moutin, head of investments at SMBC Private Wealth, was quoted by BBC News as saying. He added:

A bank run is already ongoing and will most likely intensify in the coming days.

Russia’s central bank, the Bank of Russia, had to increase the amount of money it supplies to ATMs Friday after the demand for cash reached the highest level since March 2020.

Several people have posted images and videos of long lines at ATMs in Russia. One Twitter user shared a video of “a queue for a Tinkoff ATM in the Liga shopping center in Khimki.” He described:

There are about 70 people in line. Eyewitnesses say the money in the ATM runs out within 40 minutes.

Russia’s central bank has urged citizens to calm down, stating Sunday that it has “the necessary resources and tools to maintain financial stability and ensure the operational continuity of the financial sector.”

However, people are still lining up to withdraw cash. A St. Petersburg resident told Reuters: “Since Thursday, everyone has been running from ATM to ATM to get cash. Some are lucky, others not so much.”

Another person waiting to withdraw cash at an ATM told Bloomberg, “I’ve stood in lines for an hour, but foreign currency is gone everywhere, just rubles.”

Jeffrey Halley, Asia-based senior market analyst at Oanda, told Reuters:

A bank run has already started in Russia over the weekend … and inflation will immediately spike massively, and the Russian banking system is likely to be in trouble.

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