Saturday, January 17, 2015

Money flowed to the maximum – BBC

Money flowed to the maximum – BBC

Capital flight from Russia broke all records and was much better than expected – in 2014 brought the country $ 151 billion. The reason for the growth of the scale of this outcome is 2.5 times became sanctions, closed on refinancing foreign markets and scare foreign investors. However, this year the outflow should slightly decrease, experts say.

The flight of capital are discussed after the 2008 crisis at every meeting on financial policy in the highest offices, lately not so greatly worried economists. Obviously, when sanctions and the current level of confidence in the Russian economy to talk about investments would be weird. However, figures released on Friday by the Central Bank, is impressive: over 2014 of the country’s “escaped” $ 151 billion.

This is a record outflow of capital in the history of modern Russia. For comparison, in 2013 it amounted to $ 61 billion, and even in 2008 was significantly lower – $ 133.6 billion.

This scale is not even the experts predicted. President Vladimir Putin said in December that the capital outflow for the year will be $ 120-130 billion. The Ministry of Finance in the fall of Head of Strategic Planning Maxim Oreshkin said that the size of the output from the RF funds will not exceed $ 90-100 billion. Central Bank in the “Guidelines for the DCT” predicted it at $ 128 billion for 2014.

outflows rose amid falling ruble, as well as the reduction of investment in Russia.

Of the total $ 19.8 billion – a transaction currency repo with banks in the fourth quarter, the Central Bank said in a statement. “An important factor in increasing net outflow of capital from the private sector in 2014, along with increased foreign assets became payments on external debt of companies and banks in terms of narrowing opportunities to refinance debt because of sanctions,” – said the regulator. Net capital inflow decreases: in the second quarter amounted to $ 22.4 billion in the first quarter – $ 48.2 billion.

«The main component of the outflow – payments on external debt. In 2014, it was necessary to pay almost $ 180 billion, and although part of the debt was refinanced or covered by exporters at the expense of export proceeds, the amount to get more. The net outflow from the banking and corporate sectors amounted to $ 130 billion (another $ 20 billion currency swaps accounted for the Central Bank, but the money on a return basis, they must be returned to the bank), “- says chief economist Vladimir Tikhomirov BCS.

The main reason for the record – after all sanctions, or rather, the lack of access to financing in foreign markets.

In fact, prior to the introduction of sanctions, Russian companies attracted new debt in foreign markets, but now it has become impossible, and they rarely restructure liabilities.

«On December peak of devaluation of the ruble, which increased the conversion of public funds – people change their rubles for dollars, and it has become an additional impetus outflow of capital” – calls another reason chief economist at Deutsche Bank in Russian Yaroslav Lissovolik.

Record, according to experts, will not be beaten in 2015: they forecast a slight reduction in capital outflows.

“For the current year are scheduled repayment on a much smaller amount – at $ 120 billion, so that if the sanctions, we can expect that capital outflow will be less,” – says Tikhomirov. Central Bank also expects to reduce the export of capital due to the decline in foreign debt payments.

According to the forecast of Yaroslav Lisovolik, the outflow of funds in the coming years will be increased and by the end of this year could reach nearly $ 100 billion, which is significantly higher than in the last pre-crisis years, when the country was extracted annually from about $ 60 billion.

However, there is Russia suddenly can help lower oil prices on the world market. “At lower prices, the possibility of an outflow of capital is reduced together with the resources that can be used for this purpose,” – emphasizes Tikhomirov.

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