Zee Beam News

RBC, 30.10.2008, Moscow 15:18:05 - Russia's international reserves have been contracting at a remarkably fast pace, down a record $31bn within a week from October 17 to October 24. The outflow of capital and exchange rate adjustment due to the euro's fall are still seen as the main reasons for declining reserves. The strained global financial market has forced investors to sell assets and withdraw funds, including from the Russian economy. In the first nine months, however, net private foreign capital inflow stood at $0.8bn, First Deputy Chairman of the Bank of Russia Alexei Ulyukayev stated last week. According to Ulyukayev, some $7bn was taken from the Russian economy in August, and roughly $25bn more in September. Although the Bank of Russian forecasts outflow for October as well, the amount is predicted to be smaller than in September. The cash transferred to Vnesheconombank to support Russian companies and banks in the face of a financial crisis has been another blow to the reserves. The bank is to be granted up to $50bn in international reserves to refinance external debts of Russian publicly traded companies. For the full year, the Bank of Russia expects the international reserves to rise 14.8 percent to $547bn, down from the previous forecast of $632bn (up 32.7 percent).