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The Central Bank forecasts a higher private capital outflow from Russia

A draft report on the guidelines of the monetary policy submitted to the State Duma was made public on Tuesday. For the past month since the publication of the previous forecast the Central Bank increased a capital outflow forecast to 70 billion dollars in 2011 and raised a mostly favorable forecast to ten billion dollars in 2012. The external assets of the private sector are expected to keep growing rapidly along with a lower growth of the resources attracted from abroad, the Nezavisimaya Gazeta cited the Central Bank as saying. The net private capital outflow will increase against the figure in the previous year to make 70 billion dollars. Meanwhile, the initial draft report on the guidelines on the monetary policy made public on October 3 expected a slightly higher net private capital outflow forecast, which the Central Bank has made from 35 billion dollars to 36 billion dollars in 2011.

The Novye Izvestia asked the experts for comments. They believe that despite the fact that the domestic currency is expected to be getting weaker that will remain one of the factors for capital drain, a sharp fall of the currency exchange rate is not expected. First of all, the Central Bank is controlling the situation with quite strong reserve resources. The Central Bank is ready to support a weaker rouble with active currency interventions. However, analytical experts believe that the authorities cannot hope for too active expenditures by the Central Bank to this effect, because “a weak rouble is more profitable for the Russian economy, primarily for the exporters now.”