Page 48 - RusRPTAug20

5.2.2​ Current account dynamics
In the first half of 2020, the current account surplus of the balance of payments of the Russian Federation amounted to $22.3bn​, compared with $43.4bn in the same period last year, according to preliminary estimates of the Bank of Russia.
The decisive factor was the reduction in the positive balance of foreign trade in goods as a result of a significant negative dynamics of exports with an unfavourable international situation in the main fuel and energy products and a decrease in the volume of export supplies in physical terms.
The value indicator of imports of goods also decreased compared to the level of January - June 2019, but in smaller volumes than exports. A significant decrease in the deficit of other items of the current account, in particular, investment income and foreign trade in services due to continuing restrictions.
The balance of private sector financial transactions in the first half of this year increased to $28.9bn from $23.3bn in January-June 2019. In the structure of net lending in the rest of the world, the key role was played by the reduction of foreign liabilities of banks; in addition, the impact on the dynamics of the indicator of transactions of other sectors on placing funds abroad remained at a comparable level.
International reserves decreased by $7.9bn, including as a result of transactions related to the repayment of sovereign debt, as well as sales of foreign currency by the Bank of Russia since March this year, which exceeded the volume of its purchases at the beginning of the year.
The CBR reports that the current account balance was down to $0.6bn in 2Q20 but remains in the black​ (vs. $9.9bn in 2Q19 and $21.7bn in 1Q20).
The decline in the current account surplus is primarily due to to the deterioration in the balance of trade in goods: the $33.5bn decline in export revenues has been only partly offset by the $8.4bn contraction in imports.
The decline in export revenues was prompted by the global lockdown, but its origins are deeper, stemming from the international trade tensions and slowdown in global trade, which preceeded the current shock.
The balance of trade in services actually shifted $6.9bn in favour of Russian exporters, as exports contracted just $8.1bn vs. the $15.0bn contraction in imports.
Also, the investment income balance has shrunk from $19.0bn in 2Q19 to $10.2bn, which is almost solely due to lower payments by the corporate sector: $17.1bn vs. $26bn last year.
48​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com