Russians only trust in cash

Credit: Ramil Sitdikov | RIAN

The circulation of cash is growing in Russia, with some RUR 80K ($1.1K) per capita in cash now in use, said Alexander Razuvayev, Head of the Analytics at Alpari.

According to him, the Bank of Russia estimates the amount of cash in the country at over RUR 11.6 tln ($164 bln).

Both businesses and individuals are withdrawing money from bank accounts. The money supply is growing because businesses start using gray schemes, paying their employees “wages in envelopes.” Over the past year, Russians have earned RUR 13 tln ($184 bln) as undeclared (and untaxed) income, Alexander Razuvayev said.

He added we probably need to think about a redenomination of the ruble now, Vedomosti reports. With a rebasing rate of 100 to 1, a metro ride will drop to RUR 0.5, and apartments will cease to cost millions of rubles. According to experts, this step should increase confidence in the Russian currency.

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