Russia Will Lose $130 Billion As Capital Flees The Country

RUBUSDBloombergRouble vs the dollar.

About $US130 billion in capital is likely to leave Russia by the end of 2014, Bloomberg reports, citing Finance Minister
Anton Siluanov.

If confirmed, the figure would mark the second worst year for the country since the 2008 financial crash, in which $US133 billion fled the country, and mark the seventh consecutive year of net outflows. It comes after the rouble fell 23% against the dollar over the past three months on the back of collapsing oil prices and a sluggish Russian economy.

Russia Capital flowsCentral Bank of Russia/Business InsiderRussian capital flows 2005-2014.

To put the figure in perspective, the entire national output of Russia’s neighbour Ukraine was $US177 billion last year.

Siluanov said that the currency would find an “equilibrium” before strengthening, with the Russian central bank having announced its intention to allow the rouble to free float earlier this month. The bank appeared to effectively throw in the towel by announcing the “abandonment of unlimited foreign exchange interventions” after spending around $US26 billion in foreign exchange reserves through October in an attempt to prop up the currency against the dollar and the euro.

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