BOFIT Weekly Review 2015/04
Outflow of private capital from Russia and foreign currency cash holdings up sharply in 4Q2014
As the immediate reason to the ruble’s slide, together the net capital outflow and the forex cash increase last year were about 2.5 times as high as in 2013. Banks reduced their foreign debt, especially in the fourth quarter, while finding international access to new credit very difficult.
Corporations appeared to have paid down their foreign debt in rather small amounts compared to payment schedules they faced. Portfolio investments, in turn, have steadily abandoned Russia. Direct investments from abroad stayed dried-up through the second half of 2014. DI outflows from Russia fell sharply in the fourth quarter, as did grey capital flows for the entire year. Hoarding of foreign currency cash, seen as a reaction to emerging problems already in the first quarter, soared in the fourth quarter.