Putin undeterred by $32 billion in capital flight, continues assault on dollar’s role

Fearing the collapse of the Russian financial system and burdensome Western sanctions in the aftermath of the Ukraine crisis, investors and businesses moved more than $32.6 billion in assets outside of Russia, primarily to offshore accounts, in the first quarter of 2015, according to reports.

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Capital flight has several negative effects on the Russian economy, including the loss of tax revenue and the reduction in funding available for investment.

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Lack of investment funding also delays attempts to modernize the economy. The Center for Macroeconomic Analysis and short-term forecasts assesses that investment activity is down 20 percent since 2013.