Transfers from Russia to neighboring countries decreased for the first time since March 2022

Transfers from RUSSIA to four neighboring countries fell by a third in May. This is the first cut since March 2022. Some Russians have already withdrawn their savings, some have returned, and some foreign banks do not accept money , experts say

In May 2023, the total volume of transfers from Russia to neighboring countries in annual terms decreased for the first time since March 2022, when such transactions became popular amid the departure of Russians from the country and card tourism. RBC studied the statistics of transfers from the central banks of Kazakhstan, Georgia, Armenia and Kyrgyzstan - they take into account money transfers from Russia to these countries through the banking infrastructure and / or through the Zolotaya Korona, Unistream and Contact money transfer systems. These data are the most accessible in comparison with the statistics of the central banks of other countries popular with Russians.

In May 2023, $625.9 million was transferred to these four countries, which is 33% less than in May 2022, follows from RBC's calculations. The May indicator also decreased in relation to April 2023, when $650.4 million was transferred.

For 13 months the situation was reversed. The last time, before the May decline, the indicator in annual terms decreased in March 2022 - by 8%. Then, after the start of a special military operation in Ukraine and the imposition of tough sanctions, the Central Bank imposed a ban on the withdrawal of more than $5,000 per month by Russians from the country. Later, these limits were significantly increased, now they are $1 million (or the equivalent in another currency) per month for any accounts in foreign banks, as well as $10,000 for transfers through money transfer systems.

Since April last year, the volume of transfers abroad has been growing (calculations for four countries). The peak in terms of the amount was reached in October 2022 ($1.1 billion). The maximum growth rates in annual terms were noted in February 2023 (225%) and in October 2022 (210%).

With the beginning of the special operation, the international payment systems Visa and Mastercard left Russia - their cards issued by Russian banks stopped working abroad. Banks of neighboring countries put forward relatively simple conditions for opening cards, and money transfer systems have become one of the most accessible and fastest ways to replenish foreign accounts.

How the size of transfers varies by country

The volume of transfers to Georgia in May 2023 decreased by 55% compared to May 2022, to $154.7 million. This happened for the first time since May 2022. In 2022, about $2 billion was sent to Georgia from Russia through money transfer systems - a record volume at least since 2012, follows from the available statistics on the website of the Central Bank of Georgia. This figure exceeded the data for 2021 by five times. Volume of transfers to Kazakhstanreduced for the second month in a row. In April 2023, it fell by 44% compared to April 2022, and in May 2023 it decreased by 78%, to $23.7 million. In total, about $775 was sent from Russia to Kazakhstan through money transfer systems in 2022, 4 million is a record low since 2014. In May 2023, 35% less was transferred from Russia to Kyrgyzstan than in May 2022 - $ 160.5 million. At the same time, the April figure for the year decreased even more - by 41%. For the whole of 2022, $2.7 billion was transferred to Kyrgyzstan through money transfer systems, which exceeds the figure for 2021 by only 3%. However, this is a record since 2005, when the statistics of the Kyrgyz Central Bank began to be maintained. Kyrgyzstan, along with Uzbekistan and Tajikistan, is among the three leading countries in terms of the influx of labor migrants to Russia. Armenia is the only destination according to which the volume of transfers continues to grow, but the rate of their growth has slowed down significantly. So, in May 2023, $287 million was transferred to this country, which is only 8% more than in May 2022. For comparison: growth rates in the remaining months ranged from 85% (March 2022) to 628% (February 2023). For the whole of 2022, $3.6 billion was sent from Russia to Armenia through the banking system and money transfer systems, which is more than four times the volume of 2021. This is a record figure since 2004, from which relevant statistics are kept. Read growth rates in the remaining months ranged from 85% (March 2022) to 628% (February 2023). For the whole of 2022, $3.6 billion was sent from Russia to Armenia through the banking system and money transfer systems, which is more than four times the volume of 2021. This is a record figure since 2004, from which relevant statistics are kept. Read growth rates in the remaining months ranged from 85% (March 2022) to 628% (February 2023). For the whole of 2022, $3.6 billion was sent from Russia to Armenia through the banking system and money transfer systems, which is more than four times the volume of 2021. This is a record figure since 2004, from which relevant statistics are kept. ReadPIONERPRODUKT .by Russia signed a DTT with Oman. What taxes do not have to pay twice Prison and "Mr. Cider": how cases related to the death of people end Artificial intelligence in HR: four pros and four cons No one has the strength left: how to work with a tired team

What are the reasons for the reduction in transfers

One of the main reasons for the increase in remittances was the relocation of Russians. Now, there is no single reason for the reduction in volumes, says Yegor Krivosheya, HEAD of the blockchain and fintech laboratory at the Skolkovo School of Management: “These include a change in the financial behavior of migrants, and the return of some people to Russia, and the use of already transferred funds from savings , and the introduction of restrictions on popular methods of transfers by large banks.

There are no regulatory reasons for a decrease in the volume of transfers from Russia to countries that are not hostile, but it is possible that a significant decrease in the volume of transactions is due to the fear of local banks to fall under secondary sanctions, adds KLP Legal partner Ruslan Chermit: “The practice of refusing to accept payments from Russia can be chosen by banks as more cost-effective in comparison with sanctions compliance both in relation to payers and in relation to banks through which they make payments.

According to Krivosheya, the downward trend in remittances is likely to continue, barring any major shocks. “Any significant changes in the macroeconomic agenda affect the financial behavior of Russians, but with short-term bursts, the effect is visible in the demand for cash and money in accounts, rather than international transfers. Therefore, translations are more sensitive to longer-term changes,” the expert concludes.