* Capital flees in pre-election year despite high oil
* Rising imports, M&A fan outflows
* Tighter central bank policy may be a solution
By Andrey Ostroukh and Lidia Kelly
MOSCOW, April 12 (Reuters) - High oil prices have sent foreign investors piling into Russia, yet the country is still haemorrhaging billions of dollars in net capital outflows each month -- because, it seems, more Russians are exporting cash.
Uncertainty over who will be in favour after the 2012 presidential election seems to be prompting some businessmen to shift cash out, companies are looking to expand abroad, while households prefer to keep savings in euros.
For the authorities, who have sworn not to introduce capital controls, such flows are harder to pin down and stop than the hot foreign money that flooded in and out of Russia in the past decade. But monetary tightening may be an option.
While prices for oil have soared to pre-crisis levels of $120 per barrel, the world's top crude producer saw net capital outflows of over $21 billion in each of the last two quarters.
"This is very surprising," said Sergei Guriev, dean of the New Economics School in Moscow and a member of President Dmitry Medvedev's council on modernisation.
"It could be related to the general political risk and uncertainty about the forthcoming elections. The risk that the new government will be even more anti-business scares Russian businesses and professionals."
Ahead of next spring's presidential elections, there are signs that Medvedev may be seeking to eclipse Prime Minister Vladimir Putin as Russia's paramount leader.
Analysts say businesses are afraid of shifts in the ruling elite and its implications after the dismissal of Moscow's mayor Yuri Luzhkov coincided with the start of outflows in 2010.
Data appears to support that it is the Russians who are responsible for the capital flight, while short-term foreign investors are showing consistent interest.
Russia-dedicated equity funds accumulated $3.6 billion in the first quarter, up from $1.4 billion a year ago and compared with outflows from Brazil, India and China, according to EPFR, which monitors investment fund flows.
POOR INVESTMENT CLIMATE
Capital outflows are also driven by Russia's poor business climate, with Sweden's retailer IKEA among those complaining openly about corruption and excessive red tape.
"The general growth of corruption and deterioration of the investment climate crossed a threshold where the Russian business opportunities are no longer attractive," Guriev said.
The Economy Ministry has cut its 2011 investment growth forecast to 6 percent from 9 percent, while the World Bank reckons that improving the investment climate should be the "top priority" for Russia.
"If there were demand for investments in Russia, the money would have been staying. Moreover, free funds are now being invested (by Russians) into securities around the globe," said Oleg Vyugin, board chairman at MDM bank, a top-15 lender.
Telecoms group Vimpelcom bought a majority stake in Orascom and Wind for $6 billion, while oil giant Rosneft sees expansion abroad as a key growth area.
After gaining almost 8.5 percent versus the dollar so far this year and outperforming other BRICs, the rouble has made foreign acquisitions cheaper.
"Outflows are likely linked to huge revenues from sales of oil which do not always return to Russia -- if there is no need for roubles why not to leave the money abroad?" said Vyugin.
CENTRAL BANK'S ROLE
The stronger rouble is also boosting Russian imports, which jumped nearly 46 percent year-on-year in the first quarter.
In addition, it encourages companies to use currency swaps to convert their borrowings into dollars and thus save on debt costs while creating another source for capital outflows.
Such schemes are facilitated by ample rouble liquidity, supported in part by central bank interventions. In the first quarter it bought $10.8 billion, injecting cash into the system with overnight rates already at pre-crisis lows.
"Excess liquidity and 'smarter' corporates is a formula for further capital outflows," analysts at Nordea said in a note, adding that tighter monetary policy could reverse this trend.
Outflows are set to hurt the current account and the rouble, and later in 2011 the central bank may be eventually prompted to hike deposit rates more actively, said Alexander Morozov, chief economist for Russia and CIS with HSBC.
"Capital outflows remain a structural problem linked to the investment climate, with the corruption factor playing a role," Morozov said. (Additional reporting by Katya Golubkova, Editing by Douglas Busvine/Ruth Pitchford)