Russian central bank blames bad business climate for capital flight

May 26, 2011, 10:31 GMT

Moscow - The chief of Russia's national bank on Thursday blamed the country's poor investment environment for what he described as a massive outflow of capital.

In the past four months, there has been an outflow of private capital of about 30 billion dollars, said Sergei Ignatiev, chairman of the Central Bank of Russia.

'This is a very big number,' he said. 'The main reason is a not completely friendly investment climate in Russia.'

Speaking at a banking forum in St Petersburg, Ignatiev said it's possible that markets doubt the stability of high oil prices and fear that the rouble will weaken if they fall.

'But the main reason, at the end of the day, has to be our investment climate,' he was quoted as saying by the Interfax news agency.

Ignatiev's comments came one day after a US State Department spokesman said that the Kremlin's prosecution of former billionaire Mikhail Khodorkovsky harmed Russia's chances of attracting international investment.

Many foreign investors in Russia say official corruption, frequently changing commercial law and government favouritism towards domestic firms make it difficult to do business in the country.