Page 40 - bne IntelliNews Russia Country report May 2017

population that spark social unrest.
5.0 External Sector & Trade 5.1 External sector overview
Russia’s central bank reported $21bn of net capital outflow for 4M17 . According to the CBR, net capital outflow accelerated to $21bn in 4M17 versus $10bn in 4M16. The figure per se is not surprising as the current account surplus in 4M16 was much lower ($16bn in 4M16 compared to $26bn in 4M17) and last year it was partially used to repay banks' debt to the CBR (banks reduced their exposure to the CBR’s foreign-denominated instruments by nearly $9bn in 4M16). The 1Q17 data also suggests that the structure of capital flows is not bad: the corporate sector has started to borrow from global markets again, increasing foreign debt by $3bn net, according to our estimates. This is in line with CBR comments that net capital outflow this year are driven by the banking sector; we believe this does not represent any threat to the ruble exchange rate and when companies are able to increase their foreign debt exposure the currency is likely to remain strong.
40 RUSSIA Country Report May 2017 www.intellinews.com