Abstract

The paper studies why Belarusian individuals didn’t withdraw deposits, but increased them at the beginning of the Russia-Ukraine military conflict. The correlation and regression methods are used to analyze daily data from 9214 individuals’ banking deposits on short notice in the Republic of Belarus from 01.09.2021–31.12.2022. As a result, the interest rate volatility had the highest impact on financial behavior in Belarus during the first months of the Russia-Ukraine military conflict. The rise of the interest rate of 1% increased the number and amount of deposits by 3.62–5.66%. The depositors from Minsk reacted by 1.2–1.89 pp. more actively than those from other regions of Belarus. The USD/BYN exchange rate volatility had a lower effect on the depositors. They converted their deposits from foreign currency into local currency under the influence of the interest rate hike rather than devaluation expectations. There was no evidence that the popularity rise of TV political news programs influenced the financial behavior of the Belarusian population in 2022.

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