Question of the Day: why do Russians intensively get the so-called foreign passports and buy up foreign currency?

Not so long ago, Novye Izvestia drew attention to the almost insurmountable difficulties that Russians have to face in order to obtain a passport. If earlier this process took about a month, now it has become almost impossible to even make an appointment to submit the necessary documents. One of the possible clues to this oddity was recently cited by RBC, which reported amazing numbers:

“In the first half of 2022, Russians received 45% more foreign passports than in the same period in 2021.” In absolute terms, there were 2.5 million happy holders of new international passports in six months!

True, experts explain the end of the two-year coronavirus pandemic. Thus, the well-known Russian demographer Aleksey Raksha claims that the increase in the number of issued foreign passports “can be regarded as a return to the pre-Covid period.” However, there is one important nuance here: the increase in the issuance of international passports in March of this year occurred against the backdrop of the closure of airspace by many Western countries, and this measure was taken precisely after the start of the special operation in Ukraine. In addition, as you know, Russian aircraft are banned from flying to Western countries. That is, it turns out that it’s almost impossible to fly anywhere, but it’s still difficult to get a passport ...

But that's not all. Traveling the world without foreign currency, as you know, is impossible. But how then to explain the fact that only individuals from Russia are withdrawn abroad about $ 7 billion a month, or $ 1.5 a week? This process intensified especially after restrictions on foreign exchange transactions were eased in July 2022, and the ruble strengthened sharply. During this time, Russian citizens bought up a record 237.1 billion rubles (about $4 billion) on the currency exchange, the Central Bank of the Russian Federation reports in its Financial Markets Risk Review.

The most interesting thing here is that the Russians purchased this money in a non-cash form, but at the same time, the amount of currency in their accounts not only did not grow, but decreased by $3 billion! The fact is that they bought their currency mainly in banks, which retained the ability to withdraw funds abroad. Apparently, the Central Bank itself decided to open the "borders" for citizens' savings, this time in order to combat the sharp strengthening of the ruble.

Egor Susin, Managing Director of GPB Private Banking, commenting on this phenomenon, suggests that this may indicate "a fairly large-scale outflow to foreign accounts of the population."

Coupled with an increase in demand for passports, the withdrawal of foreign currency abroad can only mean one thing: a new wave of emigration is not yet over. And many Russians want to have time to leave the country before the West finally closes its borders for them.