'08 Capital Inflows May Miss Target

The country is likely to see a small net capital outflow this month, a Central Bank official said Thursday, adding that there are "big risks" that the full-year forecast for inflows of $40 billion might not be met.

"It is entirely possible that [in September] there will be a net outflow. Not a big one, up to what we had in August," First Deputy Chairman Alexei Ulyukayev told reporters.

"Our full-year forecast is unchanged: net inflows of $40 billion. But there are big risks that this forecast will not be realized."

Ulyukayev has estimated that net capital outflows were $4.6 billion in August. A poll of analysts found that they have cut their estimate for 2008 net inflows to $25 billion.

Ulyukayev said the Central Bank had sold several billion dollars since the start of the month to prop up the ruble.

Data on Wednesday showed that the country's gold and foreign exchange reserves fell $8.9 billion to $573.6 billion in the week to Friday, in part as a result of the Central Bank selling dollars to stop the ruble from weakening beyond the 30.41 mark against a basket of 55 cents and 45 euro cents.

The Central Bank has also been active in the money market, boosting liquidity through ever-larger offerings at its twice-daily repo auctions.

On Wednesday, it injected 274 billion rubles ($10.7 billion), followed by 247.9 billion rubles in Thursday's first auction.