Banks in Kazakhstan, Belarus, Kyrgyzstan, and Armenia simultaneously raised the cost of accepting Russian cash over the summer. As reported by the Foreign Intelligence Service, fees for depositing and exchanging rubles at some institutions reached 15–20%, which effectively devalues the transaction for the client and makes the ruble an illiquid asset even in countries that moscow has traditionally regarded as its financial rear, UNN reports.
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The intelligence service notes that control over cash circulation is tightening inside the russian federation, and holders of ruble cash are trying to move it abroad in order to deposit it into accounts and convert it into something more stable. The flow of cash is growing, while there is no demand for it in neighboring countries: local businesses and residents are in no hurry to settle payments in rubles, and banks are left with deadweight currency that is expensive to store, transport, and return to the russian federation. Prohibitive tariffs are a way to cover costs and simultaneously discourage people from bringing rubles to the teller window.
For the kremlin, the consequences of this process are unpleasant under any scenario. The ruble’s liquidity in foreign markets is declining: with such fees, it is more profitable not to deal with ruble cash at all. EAEU banks are increasingly less interested in accumulating a currency that is subsequently difficult to place, and this accelerates the transition of settlements to national currencies and the yuan. For Russian businesses and citizens who have continued to rely on direct banking operations, the path is becoming more complicated: they have to turn to intermediaries and non-bank exchange, pay for multistage conversion, and put up with opacity and the risk of losing money at every stage
The intelligence service added that the situation is unlikely to improve on its own. As long as the inflow of ruble cash does not subside, the tariffs will spread to new banks and new types of transactions, and it is telling that even subsidiaries of Russian state-owned banks have already joined in. This means that the excess cash is not a private anomaly but a systemic problem that financial institutions do not know how to handle. The kremlin will most likely respond by attempting to push settlements into the cashless and digital sphere, but without restoring real demand for the ruble abroad, this is merely cosmetic. The space that moscow spent years building for the ruble within the EAEU is contracting, and with it the financial leverage that the kremlin has grown accustomed to using to keep its neighbors in line is weakening.