The Ministry for the Economy estimates capital outflows at USD 8bn in April (which is lower than the USD 13.5bn in January, USD 9bn in February and USD 12.6bn in March, as calculated from the 1Q12 BoP data) and expects that this will continue in May. However, for the whole year the Ministry sees net private capital outflows slowing to USD 15-25bn in 2012, from USD 80.5bn in the previous year.
In addition, MinEconomy thinks that RUB is much weaker than it could be assuming such high oil prices: USD/RUB would be at 27-28 had capital outflows been more moderate in the first months of 2012.
During 4mo12, private capital outflows were significant, but decelerating. We think that the CBR is likely to revise its January-February outflow estimates upwards, making March’s figure smaller, due to the released trade balance and the CBR’s interventions numbers for 1Q12.
Hence, even on a downwards trend, capital outflows will continue putting pressure on RUB and helping the CBR to contain inflation risks.
Meanwhile, we are more conservative than MinEconomy and expect capital outflows at USD 40bn this year (and USD/RUB at 31.0) on strong CA and the CBR’s lower interventions.