A RUN on Russian banks has begun as Western sanctions send the ruble into freefall, sparking hopes of civil unrest against Vladimir Putin.
Pictures show long queues outside cash machines in St Petersburg as locals race against time to withdraw their life savings before they’re wiped out.
It comes as Russia’s central bank says it will not open the Moscow Stock Exchange today.
Jeffrey Halley, a senior analyst at OANDA, told Reuters: “A bank run has already started in Russia over the weekend… and inflation will immediately spike massively, and the Russian banking system is likely to be in trouble.”
Russia’s central bank hiked interest rates from 9.5 percent to over 20 percent in a bid to stop a run on the country’s currency, the ruble.
And the country’s top economists and finance ministry have ordered exporting companies to sell 80 percent of their foreign currency reserves.
It comes as the value of the ruble continues to tumble against the dollar and euro on the Moscow Stock Exchange on Monday.
And despite banking chiefs’ attempts to stop an all-out economic Armageddon, Russia’s economy shrank by 30 per cent overnight to an all-time low.
Russia is believed to be spending as much as £15billion a day to fund the invasion of Ukraine, experts believe.
The European Central Bank also warned that the European subsidiary of the Russian state-owned Sberbank – one currently under UK sanctions – was facing bankruptcy.
The UK, US and EU have ratcheted up sanctions against Russia in recent days, going as far as banning certain Russian banks from accessing financial messaging service SWIFT and not allowing any of the country’s aircraft from landing or departing and flying over EU territory.
It comes as protests against the invasion in Ukraine broke out across Russia on Thursday.
In the capital Moscow, protesters carried placards reading “No war. Putin, go away,” and posters comparing him to Hitler.
And in neighbouring Georgia, a former Soviet republic, thousands of Russians marched and chanted “net voyne” (“no to war”) and “Putin khuylo” (“Putin is a d***”).
One protester said: “Putin’s main goal is to re-write history and somehow convince the world that he hasn’t turned Russia into an empire of evil, but it’s plain for everyone to see.”
More than 150 municipal deputies — similar to local MPs — from various Russian cities wrote in an open letter: “We, the deputies elected by the people, unreservedly condemn the attack of the Russian army on Ukraine.
“This is an unparalleled atrocity for which there is and cannot be justification.”
Demonstrations against Russia‘s leader have also spread around the world in the wake of five days of fierce fighting, which have led to the killing or capture of at least 2,800 Russian soldiers.