2/22/99 - Russian Central Bank losing battle against capital flight
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MOSCOW, Feb 22 (AFP) - Russia"s Central Bank admitted Monday it was losing the battle against so-called capital flight, the haemorrhage of funds off-shore, despite rigorous control methods, Interfax reported.
Bank deputy chairman Oleg Mozhaiskov told the agency that Russians were finding ever more ingenious ways to spirit funds out of the country, continuing a seven-year mass exodus of capital that has almost bled the Central Bank dry.
Russia continues to run a huge trade surplus, yet Central Bank reserves languish near two-year lows, all of which implies that billions of dollars are slipping out of the country each month, economists say.
The bank"s gold and hard currency reserves currently stand at just 11.3 billion dollars, dwarfed by a total foreign debt of more than 140 billion dollars.
"Our funds are leaving the country disguised as import supplies," Mozhaiskov was quoted as saying. "The capital flight in the form of unsanctioned operations is one of our weak points.
"The Central Bank is using different ways to stop it, but our people"s inventiveness has no limits and a new restriction gives birth to a new invetion," he said.
The government has estimated total capital flight in the seven years since Russia secured independence from the Soviet Union at some 76 billion dollars.
The Central Bank has slapped on tight exchange controls in a bid to defend the ruble, obliging exporters to repatriate 75 percent of their hard currency revenues, but economists are sceptical that exporters are obeying the order.
The drain of foreign currency has hamstrung bank efforts to defend the ruble, which was stable Monday at 22.84 to the dollar. |
