The global financial crisis has so far cost Russia a total of 15 billion dollars in capital outflow and could raise inflation by up to two percentage points more than previously anticipated, said Russian Finance Minister Alexei Kudrin.
"We do not yet have exact figures, but the capital outflow due to the crisis has reached a level of 10 to 15 billion dollars," Kudrin said in a television interview, adding that the Russian investment market has lost 52 percent of its capitalization."Inflation could be one to two percentage points higher than we had predicted, but not much higher," Kudrin stated.
Russia is certainly not the only one suffering the consequences of the crisis. "China has stumbled, Brazil as well, along with many other countries," Kudrin said, warning that it could take up to a year before things return to normal. Russian authorities had previously promised to inject 44 billion dollars into the markets to restore shaken investor confidence, and the central bank announced that it had reduced the mandatory reserve for banks by four percent.
The RTS stock market recorded a decline in stock indices of 11.47 percent and MICEX by 17.45 percent last Tuesday, marking the worst trading day since the financial crisis that severely hit Russia in 1998, resulting in an explosion of inflation, the collapse of several major banks, and political turmoil.
So far, the RTS has lost 57 percent in value compared to the record level reached in May, a crisis that analysts attribute to a mix of factors, from falling energy prices, through turmoil in global markets to political issues, including concerns regarding the war with Georgia. Meanwhile, the central bank reported last Thursday a decrease in Russian foreign exchange reserves by 13.3 billion dollars, bringing their amount down to 560.3 billion dollars on September 12, compared to 573.6 billion dollars recorded a week earlier. (H)
