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People fly Russian and Ossetian flags before a concert to commemorate South Ossetia's war dead. - 


Bob Moon: Earlier this week, the world's richest industrial countries called for increased economic support for the embattled former Soviet state of Georgia. Now, Russia may be seeing the flip side of that coin, so to speak, as foreign investors pull billions of dollars out of Russia in response to its invasion of Georgia. Official figures show the sharpest fall in the country's foreign currency reserves for a decade. From the European Business desk in London, Marketplace's Stephen Beard reports.

Stephen Beard: Russia's central bank says its reserves fell by $16.5 billion in the week following the invasion of Georgia. That's the biggest fall since the debt crisis of 1998. Analysts say the drop reflects the flight of foreign money. Western investors have scrambled to get out of Russian shares and bonds and out of the rouble.

Flush with oil revenues, Russia is well-placed to whether the storm. Its currency reserves are still at very high levels. But the exit of foreign cash has caused discomfort. Russian companies already find it hard to raise capital. That could crimp the country's growth.

NATO and the E.U. merely warned the Kremlin of adverse consequences. It's the financial markets that are meeting out the punishment.

In London, this is Stephen Beard for Marketplace.