Has the capital outflow in Russia cooled down?

Ukrainian events exert an immediate influence on macroeconomic situation in Russia.  In the first quarter of 2014 the tangible pressure was placed on rouble and stock market. The capital outflow fastened under the threat of sanctions on the part of Western governments. 

However, both internal and external investors start recovering their temper gradually and appraising the existing state of affairs less emotional. According to Maksim Oreshkin, director of Long-range Strategic Planning Department of the Ministry of Finance, the capital outflow in April was around USD 4,6 billion, that is much less than the indicator documented a month earlier. Market stabilization will lead to trend reversal and rate diminution of capital export. 

Earlier Elvira Nabiullina, the Head of the Bank of Russia, indicated the key sources and reasons for the capital outflow. Within the first quarter of 2014 this indicator reached the level of USD 63 billion, two-thirds of which are accounted for by internal conversion and purchase of currency in cash by citizens and companies. This was related to increased uncertainty, caused by high rouble rate volatility and sharpening of geopolitical environment. Nabiullina brought into focus the fact that the remained third of the capital outflow is comparable with similar indicator of the first quarter of 2013. 

On the whole, following the results of the current year, the Ministry of Economic Development and Trade predicts the capital outflow from Russia at the level of USD 90 billion. The similar estimate (USD 85 - 90 billion) is given by the Head of the Central Bank of Russia. As a comparison, in 2013 the capital outflow in Russia made USD 59,7 billion, in 2012 – USD 53,9 billion.

In this respect, the financial authorities feel quite optimistic about the future and if the situation will be stable, significant slowdown of cash outflow is expected in II, III and IV quarters.

Stores will be penalized for refusal to accept bank cards

The stores with smaller turnover will be able to continue charging only in cash. Sales outlets will be penalized by Rospotrebnadzor (Federal Service for Consumer Rights and Human Welfare Protection), and the size of penalty will vary between 30 000 and 50 000 RUB from each fixed violation. The so-called period of transition will act before 1 January 2015, during which enterprises should prepare for relevant innovations. 

Therewith separate sellers will be also penalized, if an organization has all necessary equipment for non-cash payment, but an employee refuse to settle it. In this case a penalty can be imposed on this seller as company's officer at the rate of 15 000 - 30 000 RUB.

Small trade enterprises, such as neighbourhood stores, stalls with vegetables and fruit, market dealers etc., do not fall within the scope of the law, because the installation and maintenance of card readers is connected for them with substantial costs. 

At the same time the experts note, that trade networks just install relevant equipment, and the control of acquiring (the range of services associated with the acceptance of bank cards for payment in a sales outlet) is performed directly by banks. Shopping facility must not be responsible for problems encountered by the acquiring, though similar cases are not prescribed in the law.

Certainly, the innovations are of benefit first of all to banks, which earn commission from each non-cash settlement (according to different estimations, the amount of such commission reaches 1,5% from the sum of transaction). Moreover, the law must stimulate development of the acquiring and turnover of non-cash payments in Russia, that in its turn is of benefit to consumers, and also makes the settlement more clear and transparent.