Russia’s net capital outflow will shrink further and may be “close to a zero” for 2010, while the ruble will be stronger than expected because of higher oil prices, Finance Minister Alexei Kudrin said.
“The outflow will be shrinking,” Kydrin said at a news briefing in Washington, where he leads the Russian delegation for talks with the International Monetary Fund and World Bank. “It will depend on what will be happening on the world markets. It will depend on oil prices.”
The government initially estimated the outflow at as much as $20 billion for 2010. The price of oil, Russia’s major export, has almost doubled during the last 12 months, boosting Russia’s foreign currency revenue.
Russian net capital outflow shrank to $12.9 billion in the first quarter from $35 billion in the same period a year before, the central bank said in a statement on its Web site on April 5.
The “global recovery will be slow and long drawn out,” Kudrin said. “Demand is not strong enough yet and it is being propped up by fiscal measures. There is also a problem of the size of the debt owed by some developed countries, such as Italy and Japan.”
Kudrin met with U.S. Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke yesterday.
Russia’s Finance Ministry will revise the ruble exchange rate estimation for 2010, as it expects the currency to strengthen because of increasing oil prices, Kudrin said.
“We have initially estimated the ruble exchange rate at an average 33.9 per dollar for this year, but it is already obvious today that this figure is going to be lower,” Kudrin said. The current estimate “will be revised,” he said.
Kudrin said a decision on whether to cancel some fees imposed on oil fields in East Siberia is expected to be approved next month.
“Our goal is to produce oil in East Siberia,” Kudrin said. “All oil fields should be profitable. No one has any doubt today that we should secure profitability and stability of oil production in East Siberia.”
Kudrin, who also met with Ukraine’s Deputy Prime Minister Serhiy Tigipko, said Russia will back Ukraine in its attempts to get a new lending program approved by the IMF.