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The Russian Invasion and Cash in Ukraine

Categories : Cash and Crises, Cash does not require a technology infrastructure, Cash is a contingency and fall-back solution
March 1, 2022
Tags : Cash and Crises, Central Bank, Europe, Humanitarian, Ukraine
Ukrainians’ demand for cash has spiked during the Russian invasion. The National Bank of Ukraine moved to secure the cash supply and encouraged civilians to make cashless payments.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

Cash and Emergency Preparedness

The Ukrainian government’s June 2021 brochure “How to Prepare for an Emergency” advised civilians to get cash in preparation for war. It recommended Ukrainians to keep “a supply of food, water, medicine, cash, and the things you need” at home and “money (bank cards and cash; distribute banknotes to different places” in their survival kits. In 2018, amid tensions with Russia, Sweden also advised its citizens to save “cash in small denominations” in case “payment cards and cash machines are not working.”

Russia’s Invasion Prompts a Run for Cash

On February 23, a day before Russia’s invasion, the National Bank of Ukraine (NBU) said that banks or exchange offices had adequate cash holdings to meet the public’s demand. Foreign cash deliveries were also proceeding as planned. After Russia attacked Ukraine by air, land, and sea on February 24, thousands lined up at gas stations and ATMs to flee the country’s cities.

People also rushed to withdraw cash from ATMs in the breakaway regions of Donetsk and Luhansk, in eastern Ukraine.

Cash remains very scarce.

NBU Secures the Cash Supply and Promotes Cashless Payments

The NBU moved to ensure the continuity of banking services and the cash supply on the invasion morning. On February 25, the NBU said that “banks to the extent possible replenish ATMs with cash. The NBU, in its turn, is supplying banks with cash and liquidity.”

Cash and Relief Operations

“Do you want to wake up in the morning and understand you should go forever, not for one day, not for two days, forever, can you make such a decision in I don’t know, 10 minutes? To bring just a bit of water, just a bit of food, single clothes, documents, money, and go outside your home forever? Can you make such a decision?” said Denis Surko, a doctor at Dnipro Regional Children’s Hospital.

After Russia occupied Crimea in 2014, over 1.4 million Ukrainians were forced to relocate, with 734,000 residing in government-controlled areas as of September 2021. According to Filippo Grandi, the U.N. High Commissioner for Refugees, as of March 2, 1 million Ukrainians have fled to countries including Poland, Moldova, Romania, Hungary, and Slovakia since the invasion started.

This post is also available in: Spanish