Although the decision to remove restrictions on the currency market earlier this month is unlikely to force a change in central bank exchange rate policy, analysts believe that it will have positive implications. “By relinquishing control over Russia’s capital flows, the Kremlin is effectively taking more responsibility for its actions, since to attract funds into the country and keep them there, economic policy will have to be favourable and more stable,” says Troika Dialog chief economist Evgeny Gavrilenkov.
Balance of flows
Especially in the short term, Russian capital might leave the country as domestic investors look to diversify their holdings, although this should be balanced by greater...
