Russia Sees Higher Capital Outflows With Ruble Near Record Level

Russian capital outflows may reach $130 billion this year, Finance Minister Anton Siluanov said, giving the government’s highest estimate yet as the ruble weakens to near its record low.

The net outflow may be $120 billion to $130 billion, Siluanov told investors in Singapore today. Last year’s outflows amounted to $61 billion. The move brings the government’s estimate in line with the central bank’s most recent forecast of $128 billion.

President Vladimir Putin is struggling to shield the economy of the largest energy exporter from the effects of sanctions over the conflict in Ukraine. Russia is running the risk of a recession as the measures help stoke inflation, accelerate outflows and weaken the ruble.

The ruble has lost more than 23 percent against the dollar in the past three months, making it the worst performer in the period among more than 170 currencies tracked by Bloomberg.

The currency will find an “equilibrium” and will start strengthening, Siluanov said today, without elaborating on when that may happen. Exports may drive economic growth after a slump in consumer spending, he said.

Russia’s central bank estimates the economy will expand 0.3 percent this year and stagnate next year, according to its base-case scenario, which assumes sanctions staying in place through the end of 2017.

EU foreign ministers agreed to expand their blacklist with more Ukrainian separatists by the end of November, an official said today during a meeting of the bloc’s foreign ministers in Brussels.

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