Many oligarchs worth billions are fleeing Russia and are moving their money elsewhere which is a huge “drain on” Moscow’s economy.
Vladimir Putin has imposed a windfall tax which would provide the Kremlin $3.6 billion to support the faltering economy.
The ruble has hit its lowest level in 15-years and is trading on Tuesday at around $90.70 compared to Monday’s close at $90.13 and the central bank of Russia has increased the interest rates with the median inflation forecast for this year has increased to 5.7%, up +0.2 p.p in June.
On 23 June when the Wagner chief Yevgeny Prigozhin started his rebellion people across Russia withdrew 100 billion rubles that weekend.
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Hilary Ingham, professor at Nottingham University, told Express.co.uk, that the windfall tax has “been raised on the largest companies, which are clearly all owned by these oligarchs.
“If you look at the sort of statements that have come out of the Kremlin, they say these oligarchs have suggested it, signalling they actually want to help support the Russian economy.
“Now, I don’t think many people will believe that, and I think more will leave. Because as I said, there are places to go to, and that’s a big windfall tax. I don’t think many are going to be actually very happy about it.
“So I think more and more will actually try and leave the country, because there are several places they can go. There are countries in the Middle East where they could go, you know, Turkey is an obvious one, as there are former Soviet states that are not backing the sanctions.”
She added, “A lot of the oligarchs are going, they’re leaving the country. Arkady Rotenberg, who’s worth $3.5billion, has gone to Azerbaijan.
“Vladimir Potanin, who is actually worth $23.7bn and is the second-richest man in the country, has gone to Turkey.
“So even though there are obviously sanctions in place and these oligarchs can’t travel to the EU, they can’t travel to the US, they can’t travel to most places, there are still countries they can go to.”
She added, “Also, people are getting rid of the ruble and getting hard currencies because they want to get funds abroad, they want to get money out and the capital controls in Russia are actually relatively weak, so you can do it, it’s not the case that you’re barred from changing rubles into hard currency.”