Capital flight from Russia has hit $220bn

The Telegraph: 11. May 2014
European Central Bank:
Capital flight from Russia has hit $220bn

By Ambrose Evans-Pritchard

The Russian finance ministry said outflows had been just $51bn in the first quarter

Uutflows from Russia since the Ukraine crisis erupted may be four times higher than admitted by Kremlin

The European Central Bank says capital flight from Russia since the Ukraine crisis erupted may be four times higher than admitted by the Kremlin, a clear sign that sanctions pressure is inflicting serious damage on the Russian economy.

Mario Draghi, the ECB’s president, said the outflows from Russia have been large enough over recent weeks to push up the euro exchange rate, complicating monetary policy for the ECB.

“We had very significant outflows that have been estimated by some to be in the order of €160bn out of Russia,” he said, without specifying where the information came from.

This is equivalent to $222bn. It is the highest figure suggested so far by a senior official with access to confidential data. The Russian finance ministry said outflows had been just $51bn in the first quarter, though the total has almost certainly risen since then.

“Draghi’s figure is a huge amount. If this is correct, it shows that Russia is in much more trouble than people think,” said Tim Ash, from Standard Bank. “This is the same scale of outflows we saw in late 2008 after the Lehman crisis.”


The Moscow Times: 11. May 2014
Russian demand for dollars soars amid Ukraine crisis

By Evgeny Razumny

Consumers' desire for dollars and euros soared in March this year amid Russia's annexation of Crimea and escalating political and economic tensions with the West.

Consumers' desire for dollars and euros soared in March this year amid Russia's annexation of Crimea and escalating political and economic tensions with the West.

Demand for foreign cash grew almost 1.5 times from February to March, reaching $14.3 billion, the highest level since January 2009, according to a report published by the Central Bank. This number incorporates purchases of foreign currency in authorized banks, currency conversions and cash taken out of foreign currency accounts.

The report associates this spike in demand with "the continuing depreciation of the ruble against the primary global currencies and uncertain expectations as to its further movement."

The majority — 66 % — of this growth was driven by a wave in cash withdrawals from foreign currency bank accounts. Altogether, individuals withdrew $6.9 billion in dollars and euros in March, an 82 % increase from February and the highest volume ever recorded by the Central Bank.

Purchases of foreign currency also rose, if less rapidly, with total volume of purchases increasing 27 % from February to a total of $7.4 billion.

Demand for dollars rose 48 % from February to $8.8 billion while demand for euros rose 50 percent to $5.3 billion.

Net demand for dollars and euros, or total demand minus the sum of euros and dollars consumers put back into the banking system, grew 2.3 times from February to March, reaching $6.8 billion.

Russian banks responded to escalating demand by hiking up imports of foreign cash from $3.2 billion in February to $15 billion in March.