The capital outflow from Russia recorded by analysts is a situational process, presidential press secretary Dmitry Peskov said.
"We continue believing that some volatility is always possible: capital smoothly comes into the country and smoothly leaves it. These are largely opportunistic factors. Certain processes substitute the other ones depending on specific investment parameters turning more attractive for investors. Therefore this is a fairly volatile situational process," TASS cited Peskov as saying.
Peskov made this comment on information of Kommersant newspaper referencing Emerging Portfolio Fund Research that foreign investors are slashing investments into Russian assets for the fourth month in succession.
The newspaper says foreign investors withdrew over $1.6 bln from Russian shares during that period, the all-time high figure over the last 48 months. Analysts associate the investors’ flight with failed expectations regarding rapprochement between the US and Russia, heightened corporate conflict between Rosneft and Sistema companies, and the decline in oil prices.
"These proceedings take place exclusively in the court plane and are not related to the investment climate in our country at all," Peskov said commenting on the influence of the corporate conflict between Rosneft and Sistema on the capital outflow.
Net capital outflow from Russia in the period of January-May 2017 increased from $10.3 billion to $22.4 billion in the same period of 2016.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, speaking with a correspondent of Vestnik Kavkaza, noted that in terms of the balance of payments, capital outflows are the result of two indicators. "The first is the balance of the current account, that is, how actively the country trades with the outside world, and whether it receives income or spends more than receives. The second is the change in the gold and foreign exchange reserves, when the Central Bank or the Ministry of Finance acquire a currency offered on the market. These values account sum to zero. If you sell more than you buy, for example, because oil prices have risen, and the Central Bank has pursued a floating exchange rate policy and does not buy the currency, then technically the entire gain is taken into account as capital outflow," he explained.
As a result, in any situation similar to the increase in oil prices in the absence of currency purchases from the Central Bank, capital outflow will increase. "In this regard, assumptions about the impact of the conflict between Rosneft and Sistema on capital outflows are absolute speculation. More than $170 billion of capital outflows left Russia from late 2014 to early 2016, so, first, $10-20 per quarter are relatively small figures, and second, they are not an issue," Konstantin Korishchenko stressed.
Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, in turn, expressed confidence that capital outflows are still partly related to the unhealthy climate of the protection of Russian entrepreneurs. "Also, probably, the volumes of capital withdrawal have increased, because incomes of entrepreneurs have increased. It impacts the first factor, because, since there is no place to invest reliably, they have to withdraw capital," he said.
Capital outflow itself cannot be assessed positively and even neutrally, since all these are lost money for Russia's economy. "If we multiply these $22.4 billion in the first quarter by 4, we will get $80 billion - a very significant outflow. It is a very unpleasant blow for our economy, which is under sanctions," Yury Yudenkov concluded.
