Europe News

Russia capital controls? ‘Impossible’: Minister

Catherine Boyle and Geoff Cutmore
Andrey Rudakov | Bloomberg | Getty Images

Russia will definitely not impose capital controls to stop the flow of money out of the country, Alexey Ulyukaev, the country's Minister of Economic Development told CNBC on Thursday.

International and Russian investors yanked more than $75 billion out of Russia in the first half of 2014, as the situation with neighboring Ukraine deteriorated. In recent days, there have been reports that the Russian central bank is likely to impose controls if this continues.

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However, Ulyukaev vehemently denied this to CNBC at an investment forum in Moscow, saying it was "impossible."

He also defended Russia's economic forecasts. The Kremlin's first post-sanctions budget, announced Tuesday night, had notably more optimistic predictions for every measure of the Russian economy than consensus elsewhere.

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The Russian government forecasts 1.2 percent core economic growth in 2015, while the International Monetary Fund has just cut its forecast to 0.5 percent from 1.0 percent, citing the geopolitical uncertainty surrounding Russia following the Ukraine crisis.

"It's very difficult to say they (other forecasters) are wrong or right because the difference is so small, between ours and theirs. So it depends on the fundamentals they include in their forecast," Ulyukaev said.

- By CNBC's Catherine Boyle