The Drain from Ukraine!

by Michael J. Howell13. May 2014 23:17
Russia's finances are looking grim. Our latest capital flow data shows that a net US$80 billion has left Russia over the last 12 months, with US$120 billion at annualised rate exiting last month alone. The net result is that our measures of Russian internal liquidity measures have halved in recent months to an index score of 28.4 ('normal' range 0-100) at end-April. The exiting cash has seemingly avoided the US dollar, possibly for fear of tougher US sanctions on Russian money, and instead piled into the Euro and sterling. This may make a Eurozone rate cut next month more certain, and it has catapulted capital inflows into the UK higher. On our CBC indexes, these now stand at 80, ('normal' range 0-100). For the brave, Russian assets must be a long-term buy. For the faint-hearted, stick with high-end London real estate!

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