CBR expects the net capital outflow of $40 billion in 2008.
Photo: Ivan Grankin
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Capital Inflow Gave Way to Outflow
The foreign stockpile of the Central Bank of Russia (CBR) grew by $200 million August 2-8 mostly on the euro depreciation to the U.S. dollar. The net inflow was from $4 billion to $5 billion a week before the military operation in South Ossetia, but it gave way to abrupt outflow past Friday.
CBR reported yesterday the change in the foreign reserves (former foreign exchange and gold stockpile of the country) from August 2 to August 8. The amount stepped up to the record $597.5 billion, but the growth was minimal from March of 2008, just $200 million.
The net foreign capital was inflowing all first week of August to Russia. In time of the permanent rates of foreign exchange and gold prices and with regard to the current state of the payment balance, a zero inflow of capital corresponds to the foreign reserves growth of roughly $5 billion. The August 2-8 inflow is estimated at from $4 billion (Goldman Sachs) to $5 billion (ING Russia, Renaissance Capital).
But Russia’s market of foreign exchange was panic-stricken already past Friday, which resulted in the mass sale of the ruble assets and ruble depreciation to bi-currency market. The capital outflow was registered on Friday, Finance Minister Alexei Kudrin announced after the weekend, while the analysts said some $7 billion flew out of the country that day.
The thing that the military operation in South Ossetia provoked the outflow of foreign money is hardly surprising. Today’s concern is its duration, to be more precise whether it will be a trend and a long and large-scale one.
www.kommersant.com
All the Article in Russian as of Aug. 15, 2008
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