Net capital inflow into Russia to reach $15-20 bln in 2006

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Net capital inflow into Russia by late 2006 will reach $15-$20 billion, a senior Central Bank official said Friday.
SOCHI, September 8 (RIA Novosti) - Net capital inflow into Russia by late 2006 will reach $15-$20 billion, a senior Central Bank official said Friday.

Earlier reports said capital inflows in the first half of this year had exceeded $11 billion, which Finance Minister Alexei Kudrin welcomed as the highest indicator for the last 15 years.

Alexei Ulyukayev, the first deputy chairman of the Central Bank, also told a banking forum Friday that the CBR had not changed its position on access to Russia's financial services market and would not allow foreign banks to open branches in the country.

"The Central Bank's position on the matter is firm," Ulyukayev said.

The issue had been one of the stumbling blocks in Russia's bilateral negotiations with the United Stares on accession to the World Trade Organization. Russian economists have consistently stated that domestic banks would be too weak to withstand competition from branches of overseas companies.

A compromise appeared to have been reached in the run-up to the Group of Eight summit in mid-July, when Kudrin said branches of insurance companies - though not banks - would be allowed to work in Russia. But the two countries still failed to strike a WTO deal during Russia's debut Group of Eight summit in July over disagreements on veterinary standards for U.S. meat imports.

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