Putin demands increased capital outflow controls

Russian President Vladimir Putin stated that the fluctuations in Russian financial markets that have increased in recent months should be reduced, saying, “We need to work on restricting unproductive, speculative demand in the economy, controlling capital outflows and monitoring the behavior of large market participants.” Putin spoke at the Strategic Development and National Projects Council meeting in the capital Moscow. Pointing out that the share of the Russian ruble in Russia’s exports is rapidly increasing, Putin said, “More and more payments are made in rubles and friendly currencies in our foreign trade. The share of the ruble in export payments has more than tripled over the last 1.5 years, from 12 percent to 42 percent.” Stating that the situation regarding the budget has generally stabilized, Putin said, “In the second quarter, the federal budget deficit decreased by almost eight times compared to the first quarter and amounted to 264 billion rubles (approximately $2.8 billion). The budget is expected to show a surplus in the July-September period.” Noting that according to World Bank data, Russia will be among the world's top 5 economies in 2022, Putin said, “According to the World Bank, Russia has surpassed Germany in purchasing power parity and economic volume.” Also making assessments regarding the recent depreciation of the Russian ruble against the dollar and euro, Putin said, “Voltage in financial markets has increased significantly in recent months. We are all aware of this. Such fluctuations make it difficult for companies and citizens to make investment decisions.” Emphasizing that Russian authorities should take the necessary steps in this regard, Putin said, “The government and the Central Bank of Russia need to use existing tools more actively and fine-tune them taking into account the objective situation. We need to work on restricting inefficient, speculative demand in the economy, controlling capital outflow, and monitoring the behavior of large market participants.”