|
|
 |
Currency Bought as in 1998
// Savings
Yesterday, the Central Bank of Russia (CB) published information on operations with cash for June of this year. For the first time since 1998, the balance of operations with individuals exceeded $1.2 billion. The fall of the stock market and the growth of the dollar rate in the spring of this year were intensified by the development of the banking crisis. Currency once again has become the means of saving, and perspectives for Russian economy growth are no longer certain.
The data published yesterday on the flow of currency in June 2004 showed the mood of Russian citizens rather vividly. According to CB, pure outflow of capital during the first two months was followed by net import in the following four months. In June, $1.58 billion was imported , which is a third more than the month before.
The dynamics of the export and import of currency correlates with the dynamics of operations with cash foreign currency between banks and individuals. Two peaks were reached by that indicator in April, when the net purchase by population made $714.49 million, and $1205.88 million in June. In June, therefore, a record balance of currency purchase by individuals was fixed since the third quarter of 1998 (it exceeded $1.5 billion then.) Then, with the stabilization of the euro on the world market, demand shifted back to the dollar.
It is not difficult to understand the logic. In April, there was talk about the dollar stabilizing in relation to the ruble. At the same time, the stock market began to fall. In May and June, people were influenced by the banking crisis. The vacation season cannot be considered a defining factor in this case. For instance, in May and June of 2003, the sales volume of currency by individuals exceeded the volume of its purchase. “This is a natural response by individuals to the actions of CB. We are returning to currency as a reliable and profitable asset, even if it is not kept in a bank,” TRUST Investment Bank main specialist Nikolay Kashcheev thinks.
The same currency import tendency continuedin the remaining summer months, since the factors that caused it were still present. Capital flight is following the export of the currency. “Considering the external sales surplus and absence of capital flight, the gold and hard currency reserves should grow $4 billion a month. But that is not happening,” Troika Dialog economist Evgeny Gavrilenkov said. Indeed, in the last three months, gold and hard currency reserves have grown only by $400,000. Corporations are responding to the intensifying relationship between the state and private capital, as expressed in the never-ending war with YUKOS.
Analysts are predicting a negative influence on economics from such processes, based on the experience of years past. Kashcheev is sure that the dedollarization of the economy ended when individuals began to purchase the currency. Capital flight decreases the quality of economy growth and the role of the financial system in it, which in consequence will decrease the growth of the economy itself, Evgeny Gavrilenkov thinks.
Aleëûey Baøbakov
All the Article in Russian as of Aug. 11, 2004
|
|
|
Photo: Sergey Miheev
