“If I could leave Russia right now, I would. But I can’t quit my job,” says Andrey, a 31-year-old industrial designer.
He won’t be able to repay the loan he took out at the bank to buy his house in Moscow now that interest rates have soared.
Millions of Russians like him are starting to feel the effects of economic sanctions aimed at punishing the country for invading neighboring Ukraine.
“I’m trying to find new clients abroad as soon as possible and get out of Russia with the money I was saving for the first installment on the house. (…) I’m scared here – people have been arrested for speaking out against ‘the party line’ ‘. I’m ashamed and I didn’t even vote for the people in power.”
Like other interviewees in this story, we are not using your full name or showing your face for security reasons. Some names have been changed.
The sanctions now hitting Russia are being called by many an economic war — they aim to isolate the country and create a deep recession. Leaders in countries like the US and UK hope the unprecedented measures will change the Kremlin’s mind.
Ordinary Russians face the loss of their savings. Their lives are already being cut short.
Sanctions against some Russian banks prevent them from using Visa and Mastercard, and consequently Apple Pay and Google Pay.
Project manager Daria, 35, said this makes it impossible for him to use the Moscow Metro.
“I’ve always paid with my phone but now it just doesn’t work. Other people are having the same problem. We found out that the turnstiles are operated by VTB bank which is under sanctions and can’t accept Google Pay and Apple Pay. I had to buy a card subway,” he told the BBC. “I also couldn’t pay in a store today, for the same reason.”
On Monday (2/28), Russia more than doubled its interest rate to 20% in after the ruble price plummeted because of sanctions. The Russian Stock Exchange remains closed amid fears of a mass sale of shares.
The Kremlin says it has sufficient resources to resist sanctions, but experts have expressed skepticism about the Russian government’s real ability.
Over the weekend, Russia’s central bank called for calm amid fears of a bank run – which happens when too many people try to withdraw cash at the same time.
“There are no dollars, no rubles – nothing! Well, there are rubles, but I’m not interested in them,” said Anton (name changed), who is nearly 20 years old and was standing in line at an ATM in Moscow.
“I don’t know what to do now. I’m afraid we’re turning into North Korea or Iran right now.”
Buying foreign currency costs Russians about 50% more than it did a week ago — on the rare occasions when they do manage to access it.
In early 2022, a dollar was trading for around 75 rubles and a euro for 80. The war helped set new records: on Monday, a dollar came to cost 113 rubles and a euro 127.
For Russians, the ruble-dollar exchange rate has long been a sensitive issue.
In the 1990s, after the collapse of the Soviet Union, the dollar was the only strong currency Russians could count on – the safest bet was to keep their dollar savings under the mattress.
When the government of President Boris Yeltsin defaulted on Russian debt in 1998, those with their money under their mattress felt they had done the right thing.
But over the next decade, various measures by the Central Bank helped to reassure Russians about the ruble’s value. Deposits in Russian currency began to grow, as did the amount of money Russians invest in the shares of Russian companies.
However, whenever there is any uncertainty, Russians always rush to the nearest ATM to withdraw dollars.
And this time was no different.
As war broke out in Ukraine last week, Russians packed ATMs, remembering lessons learned from previous crises.
Ilya (name changed), who is in his 30s, has just paid off the mortgage on his house in Moscow. He says he can’t move “any time soon”.
“When the operation in Donbas started, I went to the ATM and withdrawn the savings I had from Sberbank in dollars. Now I literally keep them under my pillow.”
“The rest of my savings are still in the bank: half in dollars and the rest in rubles. If things get worse, I’ll withdraw everything. I’m scared because I think we’re going to have a wave of robberies. But that’s what it is.”
Videos and photos on social media showed long lines forming at ATMs and exchange offices across Russia in recent days, with people worried that their bank cards might stop working or that limits would be placed on the amount of cash they can withdraw.
Dollars and euros began to run out a few hours after the invasion. Since then, very limited amounts of these coins have been available. And there is a limit on how many rubles you can withdraw.
Standing in a line in Moscow, 45-year-old Evgeny (name changed), said he wanted to withdraw money to pay off his mortgage.
“Everyone I know is anxious. Everyone is stressed. I have no doubt that life is going to get worse. War is horrible.”
“I think all countries are hypocrites and now the ‘big countries’ are measuring forces, trying to prove which one is cooler than the other. And all the people are suffering.”
Marat, 35, says: “Today is the first day I decided to withdraw money and I had no problems. I took out rubles just in case. I’m not very good at making predictions, but I suspect our life will get worse. Time will tell. .”
The money problem is not limited to Moscow: People are looking for dollars or euros in places like Perm, Kostroma, Belgorod and other cities, reports BBC Russian (the BBC’s Russian-language news service).
An anonymous IT expert even created a Telegram bot that automatically checks ATMs at Tinkoff, a popular private bank, for euros or dollars and shares the location of the point with subscribers.
Many are trying to pre-order money through their banking apps, a feature of Russia’s banking system, which is quite developed.
On Sunday night (27/2), when the sanctions against the Russian Central Bank’s reserves were announced, it was still possible to use an application to order a dollar for up to 140 rubles and a euro for up to 150.
But on Monday, customers of Russia’s largest state-owned bank, Sberbank, told BBC Russian they could no longer order money through the app – they would have to go to the office and sign a form.
Banks deny that there are any liquidity problems – and analysts agree that the cash shortage at ATMs is more likely to reflect an attempt to avoid a bank run.
The Kremlin said Russia was ready to face sanctions, though it did not say whether companies would receive extra help, as they did during the pandemic.
But ordinary Russians – many of whom are informed by state-controlled media that echo the Kremlin’s speech – will soon begin to notice differences in their lives.
Moscow residents are already reporting some queues at supermarkets, with people considering stocking up on goods that may be in short supply due to price increases or trade restrictions.
Russian companies could end up cutting hours or halting production as sanctions take effect. In addition to the devaluation of their economies, many Russians are predicted to lose their jobs already as the Russian economy is being cut off from global financial markets.
For Russians, all this brings back memories of what happened when Putin annexed Crimea in 2014 and there were hours of queuing in front of banks.
At the time, exchange offices had to hastily buy new electronic boards with five digits, when the old ones no longer had space to inform the quotation.
At that time, a dollar normally cost 30-35 rubles – an unthinkable amount these days.
collaborated Amalia Zatari of BBC Russian in Moscow
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
