Conflict Cost Russia $7Bln in Outflows

Russia had capital outflows of $7 billion during the short conflict between it and Georgia over the separatist region of South Ossetia, Finance Minister Alexei Kudrin said Sunday.

The conflict spooked investors and sent Russian stocks tumbling to their lowest levels in nearly two years.

"Outflows of [foreign] currency from Russia were $6 billion on Friday [Aug. 8] and $1 billion on Monday [Aug. 11]," Kudrin told reporters.

Russian stocks rebounded Aug. 11 after President Dmitry Medvedev signaled that the conflict was nearing an end. Russia signed a cease-fire declaration Saturday, a day after Georgia. Kudrin said political risks were likely to further damage prospects for total capital inflows to Russia for the whole of 2008.

The total would probably be less than the $30 billion to $40 billion forecast by the Central Bank, because of "continued turbulence on global financial markets and some political risks which have appeared in recent days," Kudrin said.