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Acceleration Of Capital Outflow
September 30, 2014 06:04


Foreign policy risks and the situation around the “Sistema” JSFC may trigger the acceleration of capital outflow from Russia, the Ministry of Economic Development admitted. According to the results of 2014, it may exceed the official target of $ 100 billion by $ 20 billion, as the Deputy Minister Aleksei Vedev believes.

The Ministry of Economic Development revised its forecast of capital outflow from Russia in this year about a month ago, increasing it from $ 90 billion to $ 100 billion. But foreign and internal policy risks can extend the range of the outflow up to $ 90-120 billion, the Deputy of the Economic Development Minister Aleksei Vedev said yesterday.

The Central Bank estimates the capital outflow of this year at $ 90 billion, hoping that its rate will significantly decrease in the second half of the year. The net capital outflow in the second half of the year may amount to about $ 20 billion, according to the estimates of the Central Bank. “The part of the outflow, which was not caused by fundamental factors and has been linked with a splash of uncertainty in the economy and in the financial markets, occurred mainly in March of 2014.

The rate of outflow of private capital have sharply fallen in the second quarter, and a small net inflow of capital was recorded in June 2014, according to the estimates” - the report of the Bank of Russia on monetary policy published on September 16 says. The estimate of Vedev was made “taking into account the situation around “Sistema” JSFC and reduction of its capitalization” - the official clarified.

The arrest of the chairman of the board of directors Vladimir Evtushenkov will not have much impact on the actual outflow of capital, the experts disagree. “The situation around “Sistema” has a great psychological impact on the market, but the impact will not be very huge in terms of the volume of capital outflows, because many investors have left the market in advance” - the chief economist of Alfa Bank Natalia Orlova says.

The economist of “VTB Capital” Vladimir Kolychev also does not consider the arrest of Evtushenkov as a factor in capital outflow. The economists believe that the main reason for the outflow of capital in the second quarter of 2014 will be the actual closing of the market of foreign borrowings for companies and banks.

Author: Anna Dorozhkina

Tags: Russian economy Sistema    

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