OREANDA-NEWS. August 07, 2008. Vice PM and Finance Minister Alexei Kudrin expects net capital inflow into Russia in 2H 2008. However, it is hard for him to estimate the amount due to high market volatility.

"I believe that we will still see capital inflow in 2H 2008, however, I cannot say how much" – Kudrin told journalists in the State Duma. "Today in the face of a global liquidity crisis it is hard to quantify the inflow", the head of MinFin noted. When asked whether capital inflow into Russia will decrease due to the Mechel affair, he replied, "Of course I believe it will decrease".

In addition, he explained that inflow is implemented both as portfolio and direct investments. According to him, the Mechel affair will mainly hurt portfolio investments. Kudrin stressed that the market downturn has been precisely a reduction in capital inflow.

The Vice PM said that MinFin expects capital inflow in line with the 2006 level (about USD 40 bn). According to the minister, at present MinFin is analyzing the situation and the forecast could be revised based on the results of this analysis.