Although monetary authorities managed to overcome difficulties on financial markets without evident tension, the analysts doubt that winning back the investors’ trust will be easy.
Photo: Borislav Kozlovsky
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Russia Hit by Outflow
Russia’s foreign reserves sank August 8-15 by the record $16.4 billion (2.7 percent). The war in Georgia scared away investors and fueled uncertainty about the future of Russia’s foreign exchange market and economy in general.
Russia’s foreign reserves shed by $16.4 billion, or 2.7 percent, to $581.1 billion from August 8 to August 15, the Central Bank of Russia reported yesterday. It was the weekly record decline in the country’s gold and foreign exchange stockpile.
But it was, perhaps, the most expected drop as well. In the environment of investors’ apprehension triggered by problems of Mechel, the reserves stepped up just $0.2 billion a week before, and it corresponded to from $4 billion to $5 billion of net capital inflow in view of the U.S. dollar's material appreciation to euro.
The drop in reserves and the capital outflow are imminent, economic analysts predicted at large. Some $7 billion flew out on conflict in South Ossetia, Vice Premier Alexei Kudrin announced this week.
But the actual figures could be even more impressive. The analysts estimate weekly outflow at between $15 billion and $20 billion, while the government expects the markets to calm down and the money to flow anew to the country. The statement of PM Vladimir Putin appears most illustrative. Russia should be ready for any development of the situation, including the negative one, Putin warned ministers at the government’s sitting.
www.kommersant.com
All the Article in Russian as of Aug. 22, 2008
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