Foreign Investors Have Dashed Putin's Hopes
- 25.09.2025, 19:46
The Kremlin chief's words were not taken seriously.
The hopes of the Russian authorities to attract money from Western investors to the Russian stock market have not yet come true. Investors from "unfriendly" countries were not interested in the offer to invest in Russian securities with a guarantee from Vladimir Putin that they would not be frozen, writes The Moscow Times.
Putin signed such a decree on July 1, and the Central Bank developed a new type of "In" accounts specifically for the new money, but no one started opening them. "No applications have been received," said Central Bank Deputy Chairman Philipp Gabunia.
The decree allows non-residents from any countries - both "friendly" and "unfriendly" - to place funds in "In" accounts and make new investments from there: open deposits in Russian banks, buy securities and derivatives market instruments.
Minfin of the Russian Federation fixes interest of non-residents to the new mechanism, assured recently the deputy finance minister Ivan Chebeskov, noting that this interest "changes depending on the geopolitical news background".
Investments are often compared to a struggle between fear and greed, and the deputy finance minister Alexei Moiseyev hoped that greed would win: "Against all odds, greed wins everything else. And the high level of profitability that can be obtained here will certainly lead to the fact that ... when people are confident that they can safely withdraw their money ... then I am sure that we will have an inflow of foreign investment."
At the beginning of the year, when the decree was only promised but not signed, the Central Bank recorded an inflow of foreign funds into the Russian market. Foreigners were buying OFZs at the Ministry of Finance's auctions. Chebeskov called this money "cowboy money": there will always be risky players who will not be deterred even by sanctions. However, the scale of such investments was small, market participants estimated it at hundreds of millions of dollars - not very much on the scale of the market.
Putin, meanwhile, demands to double the capitalization of the Russian stock market by 2030 and bring it to 66% of GDP - this is one of the "national development goals". One of the most important conditions for attracting funds to the market is trust, Central Bank Chairwoman Elvira Nabiullina often repeats. Meanwhile, the assets of old investors are blocked in Russia on "C" accounts. They cannot be transferred into currency or withdrawn from Russia without the permission of the government commission - they can buy OFZs and pay taxes. Proceeds from the sale of Russian assets, interest and dividends on Russian securities are credited to these accounts.
The value of these assets is unknown. Experts of the Gaidar Institute estimated the total investments of non-residents in Russian stocks and bonds at $192 billion. The amount of funds in the "C" accounts exceeded a trillion rubles in early 2024, since then it should have grown due to income on securities. But they will not be enough to buy out all the frozen assets, the Central Bank admitted, estimating them at nearly 6 trillion rubles.
The Russian authorities position the blocking as a response to the freezing of Russian reserves by about $300 billion. It helped avoid the collapse of the financial system after the war began. In addition, the authorities consider the blocked assets as compensation in case of withdrawal of reserves. First Deputy Chairman of the Central Bank Vladimir Chistyukhin called them an exchange fund.
But it is difficult to explain the seizure of assets of foreign investors (e.g. Danone) or the requirement for companies leaving Russia to sell assets at a huge discount (first 50% and then 60%) and pay an "exit tax" - a voluntary contribution to the budget (first 10%, now 35%) - as retaliatory measures.