Page 59 - RUSRptSept18

The outflow of capital from Russia slowed in the II quarter of 2018, while the export of capital by the private sector fell almost to zero , according to the Economy Ministry published in the Ministry of Economic Development. Against the background of capital outflows in the state and banking sectors, operations of other sectors generated an inflow of capital of $2.8bn, the ministry said.Net outflow of capital from Russia increased by 24% in five months The outflow of capital on the financial account was $9.9bn compared to $14.4bn in the first quarter. It was formed mainly due to reduction of public sector liabilities to non-residents, the Economic Development Ministry said. During the second quarter there was a consistent exit of foreign investors from OFZ - this situation was observed for the first time since the beginning of 2017. Non-residents sold OFZs for $6bn. The total capital export by the private sector in the first half of 2018 amounted to $17.3bn compared to $14.4bn a year earlier, the Central Bank said.
7.1 FX issues
The Finance Ministry on August 3 announced that it will spend R383bn on FX purchases ( $6.1bn assuming USD/RUB at 63) between August 7 and September 9 -- a record high and slightly below bankers estimate of R387bn.
The ministry estimates additional oil and gas revenues in August at R388bn, versus R387bn in July. The actual figure for July came in R5bn short, while the actual figure for June came in R40bn short. So, this time FX purchases, which equal an estimate of additional oil and gas revenues plus a correction for the prior month, will climb by R36bn.
On a daily basis, FX purchases will rise to $260mn from $250mn in the current period. This is due to the fact that there will be 23 working days in the upcoming period, the highest number so far this year.
Bankers expect FX purchases to ease to R370bn in September should the price of Urals stay near the current level of $72/bbl. On a daily basis this would mean a further pickup to $290mn, as the September purchasing period will have only 20 working days. However, such a minor change would not materially affect the exchange rate.
59 RUSSIA Country Report September 2018 www.intellinews.com