Capital inflow-outflow balance likely to be negative in Jan, but less so than end-2011 - CBR
MOSCOW. Feb 3 (Interfax) - The capital inflow-outflow balance for January of this year is likely to be negative, but much less so than at the end of 2011, First Deputy Chairman of the Central Bank of Russia (CBR) Alexei Ulyukayev said at the Russia Forum 2012 on Friday.
The global capital market has begun to open up - Sberbank and Vnesheconombank (VEB) have made successful bond placements totaling under $3 billion, he said. "We see that opportunities are also arising for other Russian borrowers," he said.
"At the same time, investment funds have changed their assessments of Russian risk, as evidenced by the positive value of capital inflow in January (from funds, not total inflow). The overall value is likely to be negative, although the minus will be much lower than at the end of last year," Ulyukayev said.
All of this will mean a much smoother situation with liquidity, he added.
"Therefore, to sum up everything I've said and to turn to the future, I think that we have permanently entered into a situation in which liquidity is becoming more popular - that is, that there will be demand for liquidity. Only in this situation do the CBR's interest rate instruments work; only in this situation do the transmission mechanism and the entire inflationary targeting system work. In a situation with excess liquidity, in theory it won't work," Ulyukayev said.
"That's the first thing. The second is that the sharp wave has passed. Throughout the year there could be more brief episodes of surges in demand for liquidity, but less than what we saw in the fall of last year," he said.
