Russia's January capital flight down by more than half to $4.6bn y/y

By bne IntelliNews February 10, 2016

Having bled money for much of the last eight years, Russia's capital flight has slowed noticeably in the last year and was down by half again this January to $4.6bn y/y.

Only a year ago, $11.4bn left the country in January in the wake of the 2014 collapse in the price of oil that tanked the ruble and lead to a short-lived panic. As the ruble lost about half its value in the space of two months, Russians scrambled to protect their dollars amid fears of a financial crisis.

But those fears have faded. Last year, capital flight came in at $56bn, half the rate of the previous year, and of that, bankers estimate that $50bn went to pay off external commercial debt.

Russia's capital flight is now running at 'normal' levels of about 3% of GDP that marked most of the 1990s. About a third of this outflow is actually due to a quirk of Russian accounting, which includes profits made by Russian firms abroad that are reinvested in the foreign entity as capital flight, whereas nearly every other country in the world doesn't. However, as only 15% of Russia's businessmen report their foreign holdings, as they are obliged to under new "de-offshorisation" rules, maybe this classification as capital flight has more justification than it would do in other countries.

"In terms of compression of financial flows, net outflow of capital from the private sector previously was $4.6bn and has developed mainly as a result of other sectors of operations," the Central Bank of Russia (CBR) said in a statement.

The CBR predicts that capital flight in 2016 will stay at more or less the same level as last year and $53bn is expected to leave, again, mostly to pay off debt.

Related Articles

Ukraine central bank slams PwC over PrivatBank audit

The National Bank of Ukraine (NBU) has accused PricewaterhouseCoopers, PrivatBank's auditing firm, of providing an inadequate evaluation of collateral under loans provided by the çountry's ... more

Macedonia to issue Eurobond in 2017 if conditions are "extremely favorable"

Macedonia sees no need to issue a new Eurobond issue in 2017, but this may happen if the circumstances on the international money market are extremely favorable, bne IntelliNews has learned from ... more

Speculation over a second downgrade grows as S&P drops outlook on Polish economy

Speculation that Poland could suffer a second downgrade of its sovereign rating at the end of the week intensified on January 10, as Standard & Poor’s lowered its estimates on economic growth. ... ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss