Russia Adds 1.56 Trillion Roubles to Cash Circulation Since Start of 2026

Russia added 1.56 trillion roubles to cash in circulation since the start of 2026, the largest increase for the equivalent period in any year outside the Covid-19 pandemic, The BBC reported. The rise coincides with repeated Ukrainian drone attacks that prompted the Kremlin to shut down mobile internet across large areas, leaving many unable to pay by card.

The government states the shutdowns aim to counter the strikes.

Cash in circulation had jumped earlier after President Vladimir Putin announced a partial mobilisation in September 2022 and during a brief mutiny by the Wagner group in June 2023. The latest increase makes it harder for the state to collect tax at a time of widening budget deficit. Russia's oil and gas sector accounts for about a quarter of state revenues, though the broader economy is slowing.

In May the Russian economy ministry cut its GDP growth forecast to 0.4 percent for 2026, the weakest since 2022. To raise revenue the Kremlin raised VAT from 20 percent to 22 percent in January and lowered the threshold at which small and medium-sized businesses must pay it.

Pharmacies, restaurants, beauty salons and corner shops have steered customers toward cash payments to keep income off the books.

Taras Skvortsov, chief financial officer of Sberbank, warned last month there were very serious signs that more businesses were paying wages in envelopes under the table. We are not seeing cash return to the banking system through cash collection, ATMs or self-service terminals, he said. It is staying in people's hands.

About 6 percent of entrepreneurs said they had turned to grey schemes to cope with the new tax burden, including avoiding cash-register receipts, according to a May survey by Opora Russia. Before the VAT rise President Vladimir Putin warned the new rules must not push firms into the shadows and called for a radical reduction in illegal employment.