Capital controls feared in Russia after $70bn flight

Capital controls feared in Russia after $70bn flight

Capital flight from Russia has spiked dramatically since President Vladimir Putin first sent troops into Crimea and may reach $70bn (£42bn) over the first quarter of the year, prompting fears that the country may soon have to impose capital controls to stem the loss.


Andrei Klepach, the deputy economy minister, admitted in Moscow that the outflows are likely to reach $65-70bn, far higher than originally expected and a clear sign that investors are extremely nervous of escalating sanctions.


“It is shocking,” said Bartosz Pawlowski from BNP Paribas. “Markets have been extremely complacent, fooling themselves that Russia is invulnerable because it has almost half a trillion in foreign reserves. But reserves can become almost irrelevant in this sort of crisis.”


Lars Christensen from Danske Bank said the authorities may resort to some form of financial coercion to lock down funds in Russia. “Capital controls are a serious risk, and should not be discounted. Whatever now happens, there has been permanent damage to the Russian economy because investors are not going to forget this lightly.”


The US and the EU are ratcheting up the pressure each day following a spate of sanctions last week on Mr Putin’s inner circle. The US Energy Department announced on Monday that it would permit exports of liquefied natural gas (LNG) from Jordan Cove in Oregon, a move aimed at boosting global gas supply.

Most importantly -

European leaders took the unprecedented step last Friday of ordering EU staff to draw up plans within 90 days to slash dependence on Russian gas, a clear signal to the Kremlin that they will not let energy politics dictate their handling of the Ukraine crisis.

Russia's "cost" for their invasion of Ukraine and occupation of Crimea is starting to hit their economy / pocketbooks. The Russian economy is not as stable as people like to believe and with Europe drawing up plans to cut their dependence on Russian gas the economic issue in Russia will only get worse.


In other news (not in article) -
Obama commented to the media earlier that if Russia continues into Ukraine, measures stronger than sanctions will be considered. On the sanction front, he commented the next round would have a global impact on Russia and would target several more key sectors of the Russian economy.

France is discussing canceling their deal with Russia to provide them with naval helicopter carriers (2-4).
Germany stopped the shipment of advanced military training equipment destined for Russia.

reply to post by Xcathdra


Ahhh, the myth that one country always needs other countries in order to survive. Russia has everything it needs to be fully nationalistic and independent of every other nation on the planet. If exports and imports stopped it wouldn't mean a damn thing, all they would have to do is restructure a little and Russia would become its own financial and economic island, a clean piece of finance floating on sea of corruption filled with financial turds. Any nation can do this if they want to take the time to dismantle their IMF controlled central banking system. The US could do it, Canada could do it, Australia could do it, etc.. etc.

This is just another part of a dysfunctional game in a dystopian reality where our world-view-skewed belief in a failing system gives it power that it should not have had in the first place. All ponzi scams are confidence games, lose confidence the scam collapses.

Cheers - Dave

Russia's "cost" for their invasion of Ukraine and occupation of Crimea is starting to hit their economy / pocketbooks. The Russian economy is not as stable as people like to believe and with Europe drawing up plans to cut their dependence on Russian gas the economic issue in Russia will only get worse.

Bwahaha, haha. Haha. Okay, I think i got it out of my system.

Russia will not economically suffer that much over of the actions they have taken in Crimea. Not as much as the EU will. Two reasons why. One Russians are willing to business with anyone. They will find someone else to buy their gas one and two, the EU is not feeling these sanctions, particularity Germany, which can ill afford any kind of economic instability as that union is on life support. No, i take that back. The EU as a body is dead, the head hasn't realized it yet.

The name of the game is resources. Not fiat, not gold, resources... well...gold a little. Anyways, they (Russia) got alot of it and we (we as in the EU and USA corporate interest) want it. It's gonna be a long, long, cold winter.

Hell, the USA has capital controls too. No amounts over $50,000 allowed to leave the country, but that's just for me and you, we all know the wealthy don't abide by the same rules we do.

But this is my favorite though, sarcastically that is.

This allows LNG shipments from other sources intended for Asia to be diverted to Europe instead, if need be

Sorry Asians, but Europeans trump you in global affairs when dealing with 'Murica.

reply to post by cenpuppie


Ah yes... The Russia can never be hurt argument.

The Russian economy seems to disagree with you - 70 billion and counting...

The US and the EU are ratcheting up the pressure each day following a spate of sanctions last week on Mr Putin’s inner circle. The US Energy Department announced on Monday that it would permit exports of liquefied natural gas (LNG) from Jordan Cove in Oregon, a move aimed at boosting global gas supply.

Good thing Jordan Cove is up and running, and ready to supply the EU today!

Why would anyone believe what a western news media and some bankers have to say about the situation in russia? You readily disregard RT and other outlets that wont fit your agenda, why should we believe anything written here?

Well seeing how America's carcass has just about been picked clean by the international bankers, it seems this Ukrainian melee is nothing more than the global vultures looking for new corpses to feed off.

U.S. public debt-to-gdp ratio is 600% greater than that of Russia.
U.S. gross government debt-to-gdp ratio is 1000% greater than that of Russia.

source: en.wikipedia.org...

reply to post by seasoul


Lol ok...

reply to post by Xcathdra

Ah yes... The Russia can never be hurt argument

I never said the Russians can't be hurt, what did I say? Oh yea this, "Russia will not economically suffer that much over of the actions they have taken in Crimea. Not as much as the EU will."