Russians turn to cash, putting more strain on slowing wartime economy
Russian citizens are increasingly turning to cash as mobile internet shutdowns, intended to counter drone strikes, disrupt digital payment systems. This shift is complicating government tax collection efforts during a period of slowing economic growth and a widening budget deficit.
Why it matters
The move toward a cash-based economy highlights the fragility of Russia's financial infrastructure under the strain of prolonged war and international sanctions.
Image source, Anadolu via Getty Images Image caption, There have been several surges in cash withdrawals as Russians seek a buffer against uncertainty
Russians are returning to cash, as mobile internet shutdowns disrupt card payments, and more businesses seek to dodge tax under mounting financial pressure more than four years into the war with Ukraine.
Russia has added 1.56tn roubles (£14.8bn; $20bn) in cash into circulation since the start of the year - the biggest rise for the equivalent period in any year outside the Covid-19 pandemic, according to Central Bank figures analysed by the BBC.
The spike comes amid a wave of Ukrainian drone attacks, which have repeatedly led the Kremlin to shut down mobile internet across large swathes of the country, leaving many unable to pay by card. The government says the aim of the shutdowns is to counter the drone strikes.
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