MOSCOW (Reuters) – Russia has no reliable data showing the extent to which foreign investors are interested in Russian assets, Central Bank Governor Elvira Nabiullina said on Friday, acknowledging that high rates were an enticing draw for non-residents.
The central bank held its key interest rate at 21% on Friday and said more rate hikes were still possible as inflationary pressures, despite decreasing a little, remain high.
Western sanctions and Russian countermeasures have severely reduced access to the Russian market for foreign investors, particularly those who Moscow considers “unfriendly”. But U.S. President Donald Trump’s apparent receptiveness to President Vladimir Putin has raised investor interest in the Russian market.
The rouble is up around 30% this year and Deputy Prime Minister Alexander Novak this week said the return of foreign investors and resulting capital inflows had helped the rouble.
Novak said foreign investors were taking stock of the geopolitical situation but did not specify the origin of any inflows. Capital flow statistics were classified in 2022.
Nabiullina, asked about non-residents’ interest in Russian assets said there was no accurate data to rely on, but said the topic was being widely discussed.
“There are objective reasons for this interest – the differential rates, the difference in profitability when investing in Russian assets and abroad,” Nabiullina said. “But, of course, the realisation of this interest is hindered by restrictions on capital flows and sanctions.”
Nabiullina added that the bank sees no risks to financial stability from the growing demand for government bonds.
Some Russian officials have sought to play up the prospect of sanctions relief, but Nabiullina was more pragmatic, saying that the bank had not taken into account the possible return of Western companies as this is so far only a “hypothetical possibility”.
Foreign brands returning could have a disinflationary impact, she said, but the bank would only refine its forecasts when solid grounds for any sanctions removal appears.
(Reporting by Elena Fabrichnaya, Anastasia Lyrchikova, Darya Korsunskaya and Alexander Marrow; Editing by Hugh Lawson)
