Russian President Dmitry Medvedev at a meeting of the board of the Chamber of Commerce and Industry in Moscow, November 11, 2008
Photo: Alexander Miridonov
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Liquidity Won’t Go West
The efforts of the Central Bank and government to stop the outflow of capital from Russia are continuing. Russian Prime Minister Vladimir Putin supported President Dmitry Medvedev yesterday with a statement saying that liquidity is not entering the market to be changed into foreign currency. Medvedev repeated yesterday at a meeting of the presidium of the Chamber of Commerce and Industry that money was not being released into the market to buy foreign currency with or to go into savings in foreign banks.
Banks that are unable to get their money out of the country are putting it back into the Central Bank, where deposits have risen 200 billion rubles so far this month.
There was a record outflow of $50 billion in October, Central Bank chairman Sergey Ignatyev announced yesterday, but that is not expected to occur again at least until the end of the year. Net outflow of capital was $16.6 billion in the third quarter of the year, and the net influx has only been $800 million since the beginning of the year. Besides the efforts of the Central Bank and government, capital outflow is slowing down due to the recovery of the Russian stock market, which is no longer falling. Analysts say that pressure on the ruble will now come not from banks, but from the public.
Economists are predicting outflow of $20-30 billion from Russia in the last two months of the year, leading to a net outflow for the year of $70-80 billion. Net outflow of capital in 2006 and 2007 was $41.8 billion and $83.1 billion, respectively.
www.kommersant.com
All the Article in Russian as of Nov. 12, 2008
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