Today, the CBR drastically hiked its forecast on capital outflow from USD36bn ( the Economy Ministry sees it at USD50bn) to USD70bn in 2011. This is more realistic view, taking into account that net capital outflow reached USD49.6bn in Jan-Sep. The new forecast also means that the CBR does not expect slowdown in outflow in Q4 now (implicitly, outflow is forecast at c.USD20bn) while previously the bank repeatedly stressed that the slowdown is likely. We welcome this more realistic approach and expect capital outflow to remain very sizable up to Q2 2012, or the period before the presidential elections. We also see high foreign debt redemptions scheduled for Q4 2011 and December 2011 in particular, adding pressure on net capital outflow. Strong current account surplus is helping to control the fx market, but the rouble is very likely to remain very volatile in the coming months.
BNP Paribas
Corporate & Investment Banking
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