Emerging Markets

'Dollars in the mattress' are not outflows: Sistema

Sistema CEO on need for Russian economic reform

Wealthy Russians are not pulling out nearly as much cash from the country as the media has reported, the CEO of Russian industrial giant Sistema has told CNBC.

Mikhail Shamolin said the figures do not stack up under scrutiny, as the very volatile rouble has distorted data. Sistema a majority shareholder in a number of Russian telecommunications, oil, utility and consumer businesses.

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"First of all, people exchange the roubles into dollars, but they keep those dollars in the mattress - that is considered to be money outflow, but it is not," he told CNBC.

"The volume of those doing that when the rouble is volatile is huge – the population is buying dollars like there is no tomorrow. And when the rouble is going down again, they are selling dollars and this repeats itself," he said, speaking at the World Petroleum Congress in Moscow.

Money stuffed in between the mattresses
Jill Battaglia | Getty Images

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Russian central bank governor Elvira Nabiullina said capital outflows had slowed to $4.6 billion in April last week, as concerns about the rouble since the peak of the Ukraine crisis have eased.

Nabiullina also put much of the capital flight down to "internal conversion" of roubles to dollars in anticipation of a decline in the rouble as a result of geopolitical tensions.

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Outflows in the first quarter amounted to more than $60 billion, more than all of 2013 the central bank said earlier this year. The International Monetary Fund cut its 2014 growth forecast for Russia at the end of April and said it expects capital outflow to reach $100 billion this year.

Last month Mario Draghi, president of the European Central Bank warned the outflows could be significantly higher than the Kremlin has suggested, estimating it could be as high as $222 billion in the first quarter, without naming a source for the data.

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Shamolin said money was also flowing back and forth between Russian conglomerates, in both private and state firms with offshore holdings, and this also was deemed as outflows from the country.

"I would not be able to give you an exact number because I am not a statistician or a government economist, but I can tell you that the real amount of money being taken out is not nearly as huge as what people think it is," he added.

By CNBC's Jenny Cosgrave: Follow her onTwitter @jenny_cosgrave