Russians buying up dollars and euros before New Year

Russians are actively buying up dollars and euros before the New Year holidays, according to the Bank Russky Standart's report.

"The end of 2019 is characterized by a slight plunge in dollar and rouble appreciation. The closer the New Year, the higher the demand for foreign currency in cash. The upcoming vacation season also affects the statistics of November and December - people need cash that is used the country they want to go," TASS cited the report as saying.

In November, compared with October, there was an increase in purchases of dollars by 2%. The average amount of one purchase increased by 33.21%. There was also an increase in purchases of euro - 0.8%, although the average amount of one purchase increased by 27.64%.

The former deputy chairman of the Russian Central bank, head of the finance, monetary circulation and credit department at RANEPA, Alexander Khandruev, speaking to Vestnik Kavkaza, noted that there are a number of reasons why there has been a surge in purchases of euros and dollars by individuals before the New Year.

“At the end of the year, people receive annual bonuses from employers, adding them to long-term savings, which are now more profitable in foreign currency. Of course, the strengthening of the ruble also plays its role, because now one can buy more dollars or euros for less rubles,” he explained.

“It used to be the other way around before, everyone ran to buy dollars as soon as the ruble exchange rate depreciated. Now people have become smarter and prefer to invest in foreign currencies when the ruble strengthens,” Alexander Khandruyev added.

The professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, agreed with Khandruev. “At the end of the year, many people receive bonuses and add part of these funds to long-term savings in the form of foreign currency funds. In addition, people have become interested in investing in foreign assets in the domestic market,” he said.

“But of course, we can't forget about New Year’s trips. Citizens often buy euros, dollars and other currencies for this purpose. In addition, people still feel a little anxious even in the conditions of today's relative financial stability in Russia, therefore they prefer keeping long-term reserves in foreign currency," Alexander Abramov concluded.