Anxious Russians grab cash and plot emigration

Five days into Russia’s conflict with Ukraine, events are moving so fast that Illarion, a 37-year-old Muscovite programmer, has decided he needs to be prepared for the worst – having to flee the country.

“A few days ago we were all saying, of course there won’t be any war. Then the war happened. Then we were saying there won’t be a nuclear war, we won’t have to flee the country,” said Illarion, one of hundreds of people standing in line at cash machines across Russia’s capital.

Large queues have formed as residents search for US dollars, which are increasingly scarce after the west imposed financial sanctions on Russia that limit its access to foreign currency.

Some people lined up for hours waiting for dollars to arrive at a branch or ATM, only for the machine to be emptied within minutes. Others even tried to track cash trucks around the city, they told the Financial Times. Anxiety was only heightened by Russian president Vladimir Putin’s move on Sunday to put his nuclear forces on high alert.

“We are now wondering whether the state is going to forcefully convert dollar savings into roubles to take the citizens’ dollars because they are being cut off from the outside. That is a reality we see on the horizon,” said Illarion. “I don’t think it is a joke any more that we may have bombs flying at us and we’ll need to flee the country, which requires having dollars in cash or cryptocurrency.”

The Russian rouble fell more than 30 per cent at the start of trade on Monday against the dollar after the US and the EU imposed sanctions on its central bank and cut access to the Swift payments system for some of the country’s banks.

Moscow then announced a ban from Tuesday on foreign currency transfers to banks outside the country.

More Russians even appear to be considering leaving the country. The search for the word “emigration” has increased fivefold last week, according to Google trends, which analyses the frequency of online searches. Most of the searches come from Murmansk and St Petersburg, a traditionally liberal city, followed by Moscow.

Lev Gudkov, the head of independent polling centre Levada, told Kommersant FM radio that the number of people willing to leave the country had increased significantly in February, reaching 22 per cent of Russians and to nearly half among the young.

Reasons include limited business opportunities, the “increasingly repressive regime” and anxiety among parents of children approaching conscription age, he said. “Whoever had been in two minds, will now be persuaded to leave as the iron curtain rolls down.”

Some have compared the situation to the communist era, when the Soviet Union was in effect shut off from the rest of the world. Others expect a repeat of the 1990s, when a collapse in the value of the currency pushed up the cost of living.

“I recall in the 1990s prices were set in dollars, even if it was illegal. The rouble was worthless. And I worry this is what we will see again,” said Alexei, an IT specialist, who had been waiting for several hours at a mall where he exchanged roubles into dollars at the record rate of more than Rbs100 per dollar. Before the war, a dollar bought Rbs70. He too said he was looking for ways to emigrate.

Elena, a 29-year-old human resources specialist from Moscow, said she is thinking of following friends who left for the United Arab Emirates before the current crisis as they could not see a positive future in Russia.

“The feelings are mixed. We are completely unprepared. This is a total mess, and it is very scary in all senses . . . That the economy collapses and we will live off [food] allowance cards as our parents and grandparents [did],” she said, referring to a system of rationing prevalent in the 1990s.

“We really hope the situation can be resolved with minimal losses, but knowing the policy of our country and where it is headed, I am not positive about the prospects . . . I’m starting to think I’ll be of more use even to my own family, my parents, by being out of here.”

Others have lined up to buy iPhones and televisions, spending roubles now in the expectation that their value will continue to fall.

“For the past few days, it’s been like Christmas for us,” said a shop assistant in an electronics shop. “People are ready to buy things even [though] we have been raising prices every few hours based on the forex situation.”

In the face of profound uncertainty, Illarion is one of those ready for all eventualities. “I have rouble savings in case everything will be okay, and dollar savings in case things are not okay,” he said. “Anything that previously seemed impossible we have to have a plan for.” – Copyright The Financial Times Limited 2022

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