Capital Outflow is Caused by Minimization of Bank of Russia's Intervention

According to preliminary estimates of the Central Bank of the Russian Federation, in the Q3 of the current year, the outflow exceeded the Q2 indicator by $4.2 bln and was equal to $13.6 bln. However, it is lower, than for the similar period of the last year, when the outflow was $18.4bln. The total capital outflow for the three quarters of 2012 was $57.9bln, which is by $12.4bln more than in 2011. Let us note that an official forecast of the Bank of Russia is at the level of $65bln, the same value forecasted also by the Ministry of Finance of Russia.

Let us remind that until this August, the prognosis for the annual amount of the capital outflow given by the Ministry of Economic Development was only $15-25bln, and then it was several times reviewed for the increase. The similar situation has been seen for several past years: at the beginning of the year the official state power authorities are too optimistic in their assessment of the possible capital outflow. At the same time, it is obvious that under economically unstable conditions in the world, high dependency of Russian economy on the export of energy sources, the institutional environment being of low quality, it is very difficult to make non-residents increase their investments in Russia or to make the residents reduce their withdrawals of funds and their transfer to foreign banks.

It should also be noted that a statistically important reason for the capital outflow over the last years has become minimization of the RF Central Bank intervention into the currency market functioning. In such a situation, the positive balance of the current payment account is compensated with the negative balance of the account for capital transactions and financial instruments.

It is obvious, that when international reserves are permanent, the capital outflow will correlate with the inflow of currency from the foreign trade. At the same time, the watched stability of the ruble exchange rate shows the demand/offer balance at the currency market..

Thus, if the current trends remain the same, the positive balance of the current account of payment balance in 2012 will be about the same that it was in 2011, which also means the capital outflow comparable with the last year. In other words, the capital outflow from the Russian Federation is supposed to be really about $75-85 bln.

P.V.Trunin – Candidate of Science (economics), Head of Monetary Policy Department