Page 61 - RusRPTNov20

narrowed from 60% y/y to 55% y/y on the back of the improvement in non-oil exports, which offset the decline in imports (-8.4% y/y). Although the services deficit increased to $3.1bn from $2.3bn in 2Q20, it remained the same as in the previous quarter (-73% y/y).
Demand for travel remained suppressed (-90% y/y) despite popular summer travel destinations such as Turkey having been open to tourists (to some extent) since early July. The deficit in investment income increased ($3.1bn in 3Q20 vs. $2.3bn in 2Q20) due to the late announcement of Sberbank and VTB’s decision to pay dividends. Overall, the deficit remained down 30% y/y.
On the financial side, net private capital outflows remained high compared to CA at $7.8bn vs. $10.5bn in 2Q20. The non-financial sector repaid its foreign liabilities for the most part, resulting in an outflow of $12.9bn from the non-financial sector. This usually happens in an adverse environment, when companies postpone or are even unable to refinance their external debts. The banking sector saw an inflow of $5.1bn thanks to higher sales of FX assets vs. the redeeming of its liabilities. The public sector supported FX liquidity with inflows of $3.2bn mainly on the back of CBR’s higher liabilities. As a result, the reserve position showed net spending at $2.3bn, which is lower than 2Q20’s $12.9bn.
61 ​RUSSIA Country Report​ November 2020 www.intellinews.com