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. Last Updated: 07/27/2016

Capital Inflows Hit $16.1Bln

Russia lured $16.1 billion of capital inflows in the second quarter, a record high, the Central Bank said Friday.

The net inflow in the three months ended June 30 compares with a revised $4.7 billion outflow in the first quarter and $5.3 billion of outflows in the year-earlier period, the Central Bank said. The figures are an initial estimate.

The inflow of funds has helped push the ruble up 7 percent against the dollar since the end of December, touching a 6 1/2-year high last month.

The flow of funds into the country may increase further after the government on July 1 ended restrictions on foreign purchases of the ruble and domestic bonds, the legacy of Russia's 1998 default on $40 billion of domestic debt. It means foreigners can now open deposits in rubles and trade the currency overseas.

The influx of money has allowed the government to set aside cash to repay debt. Russia on June 30 signed an agreement with the Paris Club of creditor nations for an early repayment of its entire debt, worth about $22 billion.

Russia's $770 billion economy could expand 6.4 percent this year, its eighth consecutive year of growth and faster than government forecasts, Economic Development and Trade Minister German Gref said on June 21. That may lead the government to revise its growth forecast from 6.1 percent, Gref said.

The Organization for Economic Cooperation and Development said in a report published July 5 that Russia must step up efforts to attract foreign direct investment after dropping the curbs on overseas investment in its bond and currency markets. The report alos said Russia has attracted less FDI than other OECD countries.