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MOSCOW, October 4 (RIA Novosti) - The IMF has released a report on Russia, which is built upon the information collated by Fund experts by August of this year, and will be further used as background material for consultations between the IMF and Russia on economic matters, says Kommersant.

The report says that 2003 was the first year to see virtually no net outflow of private capital from Russia (it trickled down to a mere $0.2 billion, while the 2002 figure was $10.8 billion, 2001 $16.6 billion, and 2002 as much as $25.5 billion). But, even with no net outflow, some budget items did show capital flight, and considerable levels at that. For example, under the "other private capital" heading (apart from direct and portfolio investments, and capital attracted by banks and enterprises), 2003 saw $13.4 billion going out - more than, for example, in 2001 when the figure was $8.2 billion. All this was compensated by banks making unprecedented borrowings abroad - $10.3 billion (compared with a maximum of $2.2 billion in the previous years) - and to a greater extent by corporate loans ($12 billion).

Russia's banks themselves issue loans to foreign banks: these credits increased from $1 billion in 2001 to $28 billion. The credits are mainly deposits placed by Russian banks in foreign banks, and commercial credits advanced to Russian exporters by their partners via Russian and foreign banks, says the report.

IMF experts are also trying to understand how the money supply in Russia almost doubled (32% in 2002 and 61% in 2003), while inflation dropped from 15% to 12%.

The solution, in their view, lies in the "de-dollarization" of the Russian economy - which happened in 2003 - as to some extent the ruble supply had to grow because ordinary people swapped their hard currency for rubles. And the "effective money supply" (the rubles plus the hard currency held by the population) did not grow as fast as the ruble supply alone.