The Russian-Ukrainian conflict has become one of the factors, which the European Central Bank (ECB) should take into account while pursuing its monetary policy, Mario Dragi, ECB Chairman, admitted last week. He added that during the Ukrainian crisis outflow of capital from Russia totaled 160 billion Euro.
Outflow of capital from Russia and the grown geopolitical risk is one of the reasons of growth of Euro exchange rate and reduction of rates of the Euro zone state bonds, said Dragi. If low rates only help such countries as Portugal and Ireland, borrowing cheap loans is a “cause for serious concern.”
“We see a very significant outflow of capital from Russia, which is estimated at 160 billion Euro,” said ECB Chairman. The figure mentioned by him is equal to $222 at the current exchange rate and this is the most significant index of outflow of capital from Russia announced by the high-ranking sources.
“This is a very huge sum. If this information is correct, then Russia is in a more difficult situation, than it was thought,” Timothy Ash, analyst of London-based Standard Bank, told The Telegraph. On the peak of the crisis in quarter 4, 2008 and after bankruptcy of Lehman Brothers net outflow of capital from Russia totaled about $130 billion.
Chris Wifer, partner of Macro Advisory, said the financial damage, which was caused to Russia in the past weeks, could cause President Vladimir Putin to lessen pressure on Ukraine (in particular, announce withdrawal of troops from the Ukrainian borders). “The European companies operating in Russia reduce the risks and transfer money to protect it from possible sanctions, while the Russian companies open bank accounts abroad to have a possibility to continue business in case of the western sanctions against big Russian banks,” Wifer claims.
