May 12, 2014 / 5:42 AM / 5 years ago

Russians ditch ruble en masse, data shows

A vendor counts Russian rouble banknotes at a market in Moscow, March 3, 2014. REUTERS/Maxim Shemetov

MOSCOW (Reuters) - Russians ditched the ruble in March at the fastest pace in more than four years, official data showed, as the currency was hit by fallout from the worst standoff with the West since the Cold War over Ukraine.

Central Bank data showed late last week that the total demand for foreign currency, chiefly the dollar and the euro, reached $14.9 billion in March, the highest since January 2009, the aftermath of the global financial crisis.

Demand was 1.5 times higher than in February, and came as President Vladimir Putin said in early March he had the right to invade Ukraine to defend Russian speakers there. He then annexed Crimea, spurring condemnation and sanctions from the West.

“In March 2014 amid the continued weakening of the ruble against major world currencies and the uncertainty of expecting further declines, the aggregate demand for foreign currency has increased dramatically,” the central bank said in a statement.

It offered no other detail for why the ruble had fallen.

Russians also rushed to take foreign cash out of their banks at a record-high pace, the bank said, withdrawing a total of $6.9 billion, nearly half of that from their dollar accounts.

The ruble lost nearly 9 percent in the first three months of the year against the dollar and a bit more than 8 percent against the euro, according to Reuters’ calculations, with most the fall registered in March.

The Russian currency has recouped some of its losses since, but the population’s switch to foreign currencies deals a blow to the central bank, which had gradually tried to establish the ruble as a trustworthy currency.

The ruble closed at 35.04 against the dollar on Thursday before a long holiday weekend in Russia and at 48.53 versus the euro. The ruble is still almost 6.5 percent down against the dollar since the start of the year.

Reporting by Lidia Kelly; Editing by Kim Coghill

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