Russian banks see massive withdrawals as expert cites precautionary moves
Russian banks faced withdrawals of 286 billion rubles in two weeks this August, with an economist calling it a precaution by depositors amid market uncertainty.
Key Takeaways
AIJihad Al-Hakim, professor of economics and global financial markets, said that depositors in Russia withdrew around 286 billion rubles in just two weeks this August, describing the move as a precautionary measure by account holders.
Speaking in an interview with Al Arabiya FM, Al-Hakim stressed the importance of understanding the real reasons behind these withdrawals. He noted that the Russian central bank has largely characterized them as normal, citing internet outages, disruptions to some electronic payments, and seasonal factors.
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He pointed out that there are several steps the Russian central bank could take before considering any restrictions on withdrawals, including injecting liquidity into the markets to calm depositor concerns and strengthen confidence in the banking sector.
He added that the central bank may then raise interest rates to encourage depositors to keep their funds in banks for longer periods and slow the pace of withdrawals.
Al-Hakim emphasized that addressing the wave of withdrawals requires gradual measures aimed at reassuring depositors and maintaining stability in the banking sector before moving to more restrictive options.