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.
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