Russian Banks Attract 2 Trillion Rubles Due to Capital Outflow
Russian banks have increased borrowing from the Central Bank of Russia amid a massive withdrawal of funds into cash. In July, the Bank of Russia issued 2.099 trillion rubles to credit institutions through repo operations, raising the total debt of banks to 6.243 trillion rubles, nearly double the level at the end of last year. The deficit of ruble liquidity is growing due to an increase in cash held by the population and a reduction in budget balances. In the first half of July, the volume of cash increased by 513 billion rubles, in June by 479 billion rubles, and since the beginning of February by 2.416 trillion rubles. The Central Bank began conducting overnight injections, issuing 600 billion rubles on July 21 and increasing the amount to 1 trillion rubles on July 22. The structural liquidity deficit in the banking system reached a record 2.4 trillion rubles. The share of problem loans exceeded 10%, which, according to IMF methodology, indicates significant problems in the banking system. The Kremlin may be forced to rescue banks at the expense of the state budget or the National Wealth Fund. The federal budget deficit of Russia in 2026 may exceed 1 trillion rubles.
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