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Kudrin forecasts net outflow of private capital at $9 billion
August 26, 2004

Moscow. (Interfax) - The net outflow of private capital from Russia will reach about $9 billion in 2004, Finance Minister Alexei Kudrin said at a Thursday briefing.

The main reason for the capital outflow is higher Federal Reserve interest rates in the United States that have sparked capital flow from all emerging markets.

"Saying that there are other additional reasons in Russia They are insignificant," Kudrin said. The Yukos situation has had almost no effect on the process, he added.

"I understand that everyone is talking about Yukos. I don't see any appreciable 'Yukos effect,'" Kudrin said.

From the standpoint of monetary-credit policy, capital outflow from Russia in the non-banking sector also eases the removal of excess money, he noted.

"Those indicators [inflation] of 10% this year and 8.5% next year will be more realistic," he said.

Forecasts for the ruble exchange rate are also built into the budget for 2005 at 30 rubles/$1 taking predicted capital outflow into account, Kudrin said.