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. Last Updated: 07/27/2016

Freeze Scare Spurs Run On Banks

Barraged by rumors that the Central Bank had ordered commercial banks to freeze hard-currency accounts, government officials issued vehement denials Friday, but their assurances were lost on thousands of Russians who lined up to withdraw foreign cash.


"They are the ravings of a madman," said Alexei Sitnin, spokesman for the Central Bank, responding to rumors that the state bank had sent out sealed letters -- to be opened at midnight Friday -- instructing commercial banks to freeze the accounts.


"We sent no such letter to our branches, nor to commercial banks," he said. "And we have not heard of any other organizations issuing such a letter to anyone."


But Natalya Bogorodskaya, deputy head of the hard-currency department at Sberbank, said that her bank had received from the Central Bank "a sealed letter to be opened Saturday morning."


Other banks contacted by The Moscow Times said that they had not received the letter, but all had heard about it. First Deputy Prime Minister Anatoly Chubais said that the rumors were ludicrous.


"It is completely absurd, both from financial and technical points of view," he said in an interview for Saturday's edition of the Moscow daily Izvestia. "No such things exist, nor can exist."


Meanwhile, Reuters reported that hard-currency account holders throughout Russia were hurrying to withdraw cash. An employee of one foreign bank in St. Petersburg told The Moscow Times that the bank had kept its tills open late so that some 80 employees could take money out of their hard-currency accounts.


Interfax quoted hard-currency dealers Friday as saying that the rumor had cut ruble-dollar trade on the Moscow Interbank Currency Exchange and in private interbank deals. The ruble fell 19 points to 3,776 per dollar Friday in moderate net trade of $26.28 million, down from $32.73 million Thursday.