"According to our latest estimates, net capital inflow [into Russia] in 2006 as a whole will be $7 billion," the source said.
Post-Soviet Russia experienced massive capital flight in the 1990's as a result of a tumultuous privatization process, when uncontrolled private capital vanished into offshore zones. Only in 2005 did capital inflow into Russia exceed capital outflow for the first time, according to Russia's Finance Minister Alexei Kudrin.
The source attributed the trend to the liberalization of Russia's foreign exchange regulations and the lifting of all restrictions on capital outflow by the government this summer. The move was part of a plan to fulfill President Vladimir Putin's instructions to that effect, as outlined in his state of the nation address to parliament May 10.
He suggested, however, that the importance of this factor would gradually fade, leading to a "new capital outflow in the near future."
