“If I could leave Russia right now, I would. But I can’t quit my job,” says Andrey.
And it is that this young man of 31 years cannot afford to take on a mortgage in Moscow when interest rates have risen substantially.
Millions of Russians like him are beginning to feel the pinch of Western economic sanctions, which have been designed to punish the country for invading neighboring Ukraine.
“I am planning to find new clients abroad as soon as possible and move out of Russia with the money I was saving for the first installment,” says the industrial designer.
“Here I am scared, people have been arrested for speaking against ‘the party line’ . I feel ashamed and I didn’t even vote for those in power.”
Like others interviewed for this article, we do not use his full name or show his face for security reasons. Some names have been changed.
The sanctions now hitting Russia are being branded as economic warfare: they are aimed at isolating the country and creating a deep recession there.
Western leaders hope the unprecedented moves will bring about a change in the Kremlin’s thinking.
Ordinary Russians face the anguish of having their savings disappear. Their lives are already being interrupted.
Sanctions against some Russian banks include cutting them off from systems like Visa and Mastercard, and consequently from Apple Pay and Google Pay.
Daria is 35 years old and is a project manager in Moscow. These measures have meant that, for example, she had not been able to use the subway.
“I always pay with my phone, but it just didn’t work. There were other people with the same problem. It turned out that the barriers are operated by the VTB bank, which is under the sanctions and cannot accept Google Pay or Apple Pay.”
“I had to buy a metro card,” he told the BBC. “I couldn’t pay at a store today either, for the same reason.”
On Monday, Russia doubled its interest rate, raising it from 9.5% to 20%, in response to sanctions and after the ruble sank to new record lows .
The stock market remains closed amid fears of a sell-off in shares.
The Kremlin says that it has enough resources to deal with the sanctions, but this is debatable.
Over the weekend, the central bank called for calm amid fears of a bank run, which happens when too many people try to withdraw their money.
“There are no dollars, no rubles, nothing! Well, there are rubles, but I’m not interested in them,” says Anton, who is in his early 20s and was queuing 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 50% more than it did a week ago , and that’s if they can get it.
At the beginning of 2022, US$1 was trading at about 75 rubles and 1 euro at 80. But the war helped set new records: at one point this past Monday, US$1 cost 113 rubles and 1 euro, 127.
For Russians, the ruble-dollar exchange rate has long been a sore subject.
In the 1990s, after the collapse of the Soviet Union, the dollar was the only hard currency in which Russians kept their savings: the safest bet was under the mattress.
When President Boris Yeltsin’s government defaulted on its debt in 1998, those who had been sleeping on their money felt vindicated.
Over the next decade, however, various central bank moves helped reassure Russians about the ruble.
Deposits placed in Russian currency began to grow and so did the amount of money that Russians invest in shares of Russian companies.
However, whenever there is uncertainty, Russians always run to the nearest ATM to withdraw dollars.
“Under the pillow”
As soon as war broke out in Ukraine on February 24, Russians flocked to ATMs, recalling lessons learned from previous crises.
Ilya, who is in his early 30s, has just finished paying off his mortgage in Moscow. He says that he can’t move out “any time soon”.
“When the operation in Donbas began, I went to the ATM and took out the savings I had in dollars at Sberbank. Now I literally keep them under my pillow.”
“The rest of my savings are still in the banks: half in dollars and the rest in rubles. If things get worse, I will withdraw the lot. I am scared because I foresee a wave of robberies. But these are the options available.”
Images on social media have shown long lines at ATMs and exchange houses across the country in recent days, with people worried their bank cards may stop working or that limits will be placed on the amount of cash they can withdraw. .
Dollars and euros began to dry up a couple of hours after the invasion. Since then, very limited amounts of those coins have been available and there is a limit to the number of rubles that can be withdrawn.
Standing in a queue in Moscow, 45-year-old Evgeny 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 will get worse . War is horrible.”
“I think every country employs double standards and now the ‘big countries’ are measuring each other’s strengths, deciding which one is better. And everyone is suffering.”
“Today is the first day I decided to withdraw money and I didn’t have any problems. I withdrew rubles just in case,” says Marat, who is 35 years old.
“I’m not very good at forecasting, but I suspect our lives will get worse. Time will tell.”
The cash problem is not limited to Moscow: people have been running to Perm, Kostroma, Belgorod and other provincial cities to get their hands on dollars or euros, the BBC Russian Service reports.
An anonymous IT specialist even created a Telegram bot that automatically asks if there are euros or dollars in the ATMs of Tinkoff, a popular private bank, and if so, shares the location with subscribers.
Many have attempted to pre-order cash through their banking apps, a feature of Russia’s advanced banking system.
On Sunday night, when the sanctions against the Russian Central Bank’s reserves were announced, you could still use an app to ask for US$1 for up to 140 rubles and 1 euro for up to 150.
But on Monday, customers of Russia’s largest state-backed bank, Sberbank, told the BBC’s Russian Service they couldn’t ask for cash through the app; they had to go to his office and sign a form to do so.
Banks deny there is a liquidity shortage, and analysts agree that the shortage of cash at ATMs is more likely to reflect an attempt to prevent a bank stampede.
The Kremlin has said Russia expected these latest sanctions and is ready to face them , though it has not said whether companies will receive additional help, as they have during the pandemic.
memories of 2014
But ordinary Russians, many of whom get their information from state-controlled television (which repeats many of the Kremlin’s lines), are expected to start noticing differences in their lives soon.
Moscow residents are already reporting some queues at food stores as people buy products they think will be in short supply due to price hikes or trade restrictions.
Russian companies could end up cutting hours or slowing production as sanctions are imposed.
In addition to the falling value of their savings, many Russians are expected to lose their jobs as the economy reels from being cut off from financial markets in the West .
For Russians, all of this brings back memories of what happened when President Putin annexed Crimea in 2014 and people queued for hours to get cash.
Exchange offices had to hastily buy new five-digit exchange rate boards when the old ones ran out of space .
Back then, US$1 usually cost between 30 and 35 rubles, an amount unthinkable these days.
Additional reporting by Amalia Zatari of the BBC Russian Service in Moscow .
- Anastasia Stognei in Moscow and Simon Fraser in London