Vladimir Putin has a choice on his hands: Make Russia great again by invading traitorous neighbour states…or make it great again by attracting billions in foreign capital. At this point, it seems, Putin is trying to have his cake and eat it, too.
Russia’s foreign investors, meanwhile, have finally woken up: Following the Georgia invasion, money exited Russia at one of the fastest rates since the 1998 financial crisis. FT:
Data released by Russia’s central bank showed a drop in foreign currency reserves of just over $16.4bn in the week beginning August 8. This was one of the largest absolute weekly drops in 10 years, according to Ivan Tchakarov at Lehman Brothers.
…Gennady Melikyan, the central bank’s deputy chairman, said the sell-off had been triggered by the “political situation”, adding: “Foreigners are pulling out of some assets and stock markets and the exchange rate has suffered most. I think we have come close to the bottom now.”
While the value of the rouble has stayed relatively stable since the start of the conflict, with the help of central bank intervention, the stock market has fallen 6.5 per cent since August 7 and companies have found it harder to raise capital as investors demand sharply higher yields to buy their bonds to reflect the perceived risk.
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