Russia suffered another day of capital flight yesterday, despite the efforts of President Medvedev to calm the plummeting Russian stock market.

Redemptions by fund investors and margin calls by banks helped to push Moscow's RTS index down a further 5 per cent.

Investors have been shedding their exposure to the Russian market, taking fright initially from the power struggle at TNK-BP and latterly from the falling oil price and the conflict in Georgia.

Hinting at government intervention in the markets, Mr Medvedev sought to reassure investors. He blamed the American sub-prime mortgage crisis for the loss of confidence and said that Russian assets were now undervalued after a sell-off that had halved the value of Moscow's RTS index since it peaked in May at 2,448. It closed yesterday at 1,334.33 a loss of 45.5 per cent in four months.

“If the right decisions are made, the situation will straighten out,” the Russian President said. “We will return to the levels that we saw at the start of the year. I believe this is in the power of the Government.”

Russia's central bank pumped 274 billion roubles (£6 billion) of one-day money into the market yesterday in an effort to improve liquidity, its biggest cash injection for more than a year. Cash has been fleeing the Russian capital markets as investors liquidate financial assets and seek safe havens from the geopolitical and credit turmoil.

Leading Russian energy and mining stocks have been hit hard by redemptions by investors in hedge funds. Meanwhile, margin calls against the oligarchs have also damaged market confidence. The owners of some leading resource companies are believed to have used their shares as collateral for big loans.

The falling market has led to calls from lenders for more collateral, leading to further share sales.

Official statistics out yesterday showed that weaker investment, credit tightening and accelerated inflation had resulted in Russia's economic growth slowing to its lowest rate in almost two years in the second quarter.

The data reinforced concerns over the outlook for the rest of the year as prices for oil and other commodities, the backbone of its economy, continue to fall.

Gross domestic product grew 7.5 per cent on the year, against 8.5 per cent registered in the previous quarter, according to the Federal Statistics Service. It is the lowest rate since the third quarter of 2006.

Rumours that the Kremlin might consider using its Stabilisation Fund, a sovereign wealth fund backed by the proceeds of oil taxation, to prop up Russian shares was dismissed by some analysts as unlikely.

Christopher Granville, Russian analyst at Trusted Sources, said that any such proposal would be strongly resisted by Alexei Kudrin, the Finance Minister.

“In any case, it would take too long to get approval. It is so bureaucratic; it took them two years to set it up. By the time it was agreed, the bear market would be over,” he said.

Instead, cuts in oil taxation are expected after signals from the finance ministry that it is prepared to compromise over demands from the oil industry for relief. Mr Kudrin is opposed to cutting VAT, a demand of the economy ministry, but he is considering cuts in oil taxes.

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