Without banks, Donetsk black market for cash thrives
Since January, the difficulties locals have keeping their finances flowing have only intensified.
DONETSK (AFP) - The entrance to the former perfume shop on a busy street in Donetsk now features a Kalashnikov-toting guard, a clear sign of the clandestine nature of the premises new business.
Inside visitors find a fully-fledged black market cashier s operation -- one of many now serving residents of this rebel hub who have been unable to withdraw money since banks and ATM machines ceased operations in zones held by pro-Russia separatists in eastern Ukraine.
With many pensioners and employees receiving payments in accounts they can no longer access for months on end, murky outfits funnelling cash to locals have proliferated in Donetsk, which has been under rebel control since April.
One of those is based in the former perfume shop, where four "operators" busily run online banking activity on laptops, and count out notes for clients waiting in queues stretching out before each work station.
Customers provide their bank cards and a telephone number, and the cashiers make an online bank transfer between accounts, handing customers requested amounts of cash -- minus a ten percent fee.
"What can you do, this is war," asks Alexander, 57, who came to the shop to cash some of his pension savings in spite of the steep commission.
"I need money to pay for food and my phone bill," he explains.
Like many other people here, Alexander receives his monthly pension of 3,500 hryvnias ($135) in a direct deposit to an account he can t access. Since November, Ukrainian banks can no longer work in the conflict zone contested by forces loyal to Kiev and pro-Russia separatists.
"It s been three or four months of this," Alexander laments, blaming the government in Kiev for his constant liquidity troubles.
It is unclear exactly how the seemingly endless flow of hryvnias ends up in the transformed perfume shop, whose windows bear a sign listing banks its cashiers cannot work with.
Since January, the difficulties locals have keeping their finances flowing have only intensified. New rules now require special passes to travel outside the rebels so-called "republics" of Donetsk and Lugansk into the Kiev-controlled territories.
But obtaining a pass for Kiev-controlled zones takes a lot of time and paperwork, residents say, and feed endemic corruption, with many people preferring to pay a bribe to bypass the bureaucracy and expedite the process.
To avert that situation and alleviate the liquidity crunch, a black market for cash has materialised to serve cash-strapped residents.
At markets and bus stops, and among apartment rental notices and job ads, small signs reading "I withdraw money for you" have proliferated announcing the services of shadow banking businesses.
Someone calling himself "Yuriy" answers at one of the numbers listed, and proposes a meeting. Once there, he requests the desired cash sum be wired to his bank account, receipt of which he verifies on his mobile phone.
Once the money comes through, he counts out the amount in cash, minus the inevitable 10 percent commission.
In order to avoid that hefty fee, residents are forced to resort to other creative methods of obtaining their savings.
"When one of our friends passes through town, he brings us money," says Angelika, who works in the commercial sector and who asked AFP not to use her last name. "We pay it by making an online transfer."
But even with the precious cash in hand, it no longer goes as far as it used to. As the value of Ukraine s national currency has plummeted, prices have risen -- seemingly without end.
At the pump on Sunday, a litre of gasoline was twice the price of the previous week, and cost four times as much as it did at the beginning of the conflict.
