The Russian ruble tumbled in value earlier this year after violence in eastern Ukraine and the takeover of Crimea sparked massive capital outflows in Russia. While it’s recovered somewhat, new warnings indicate its long-term stability is dependent on curbing more capital flight, and keeping investor’s money in the Russia. CCTV’s Natalie Powell reports from Moscow.
Signs posting the exchange rates of dollars and euros line many of Moscow’s streets. Geopolitical events this year and the threat of sanctions against Russia have seen large amounts of capital leave the country in this way — exchanging rubles for dollars or euros.
Capital outflows here reached a peak in March, with many changing their savings into dollars or euros to try to safeguard against the falling value of the ruble. The situation has become better in recent months, but it’s likely outflows this year are likely to be higher than last year’s.
Money exiting the country means less of it is at work in the local economy, and that’s a concern for any country. The Russian economy has also been stagnating — over the past three years growth has been between 2 and 3 percent.
Margarita Zobnina, associate professor at Moscow’s Higher School of Economics, says the low growth rate combined with recent events has made Russia’s population nervous about the future. Russia’s capital outflows are expected to be over $100 billion for the full year. And although capital flight has eased, many have decided to keep their savings in dollars or euros, which could have a negative effect on the long-term stability of the ruble.