Russia capital flight reaches $50 bn: central bank

4th October 2011, Comments 0 comments

Russia on Tuesday reported $18.7 billion in capital outflows in the third quarter that far outweighed state estimates and underscored the uncertainty that has gripped the country in recent months.

The Central Bank said the poor quarter came on top of the $30.6 billion that had left Russia between January and August. The nine-month total has now reached $49.3 billion, compared to $16 billion just one year ago.

Government officials have blamed the capital flight on a fragile investment climate in which investors complain of red tape and corruption as well as the inability to defend their rights in court.

But some economists said that even more money has headed for safer harbours in the second half of the year because investors could not decipher whether Prime Minister Vladimir Putin was intent on returning to a Kremlin post he held in 2000-2008.

Putin last month announced his decision to return to the Kremlin in March polls, replacing his hand-picked successor Dmitry Medvedev as president.

But the market's relief over that announcement was followed by the shock resignation of Russia respected finance minister Alexei Kudrin.

The Central Bank issued no comment on the figures but stressed that the third-quarter figures were only an estimate.

© 2011 AFP

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