Page 7 - RusRPTNov18

Preliminary balance-of-payments figures show that the value of Russian exports of goods and services increased by nearly 30% y/y in the third quarter of this year. Higher oil prices were the main driver of higher export earnings. In contrast, on-year growth in spending on imports of goods and services came to a halt in July-September, with growth for the first nine months only reaching 5%.
Still, a miasma lies over Russia’s business climate that is holding back more progress. A net $19bn in private capital flowed out of the country in the third quarter, bringing the value of net capital outflows for the first nine months of the year to $32bn (the annual outflows in 2016 and 2017 averaged slightly over $20bn).
In January-September, foreign direct investment inflows to the corporate sector (excl. banks) were exceptionally modest , a mere $2.4bn. Russian FDI outflows amounted to $17bn, roughly the same amount as in previous years.
In a parallel development at street level, the population were withdrawing dollars from FX retail banking accounts following rumours that if the US imposed harsh sanctions Russian state banks might forcible convert dollar savings into rubles. The Central Bank of Russia (CBR) came out to strenuously deny the talk, but outflows into cash were significant, although not system threatening.
In general the scare may have been provoked by the government on purpose as it has clearly launched a long-term campaign to de-dollarize both the economy and its international settlements.
7 RUSSIA Country Report November 2018 www.intellinews.com