Cash Is Fleeing the rf

In the first quarter of 2025, the amount of cash in circulation in the territory of the rf decreased by more than $11.1 billion, having reached $193.3 billion. This was the largest quarterly decline since the beginning of the full-scale armed invasion of Ukraine.

The key factor behind this dynamics is the continued high level of the policy rate, which, in turn, makes bank deposits attractive. At the same time, the central bank of russia points out a decline in the amounts of lending. The continuation of such trends in the face of further growth of the deposit base creates an additional burden on the banking system of the rf.

According to the Foreign Intelligence Service of Ukraine’s forecast, in 2025, the policy rate in russia will remain at a high level, in the range of 19–22 %.

The sharp decline in the amount of cash in circulation indicates a rise in the russian population’s inflationary expectations, which is explained by the desire to protect cash from depreciation. At the same time, this situation is beneficial for the kremlin, as it facilitates the implementation of lending programs for defense industry enterprises and allows it to strengthen control over internal financial processes.