Page 53 - RusRPTMay20

5.2​ Balance of payments, current account
Russia trade dynamics $bn
Mar 2019
Apr 2019
May 2019
Jun 2019
Jul 2019
Aug 2019
Sep 2019
Oct 2019
Nov 2019
Dec 2019
Jan 2020
Feb 2020
Mar 2020
foreign trade t/o
52.4
57.5
57.6
51.4
52.4
55.7
55.7
55.9
59.8
58.6
56.1
46.6
46.6
export of goods
34.0
36.5
37.5
31.6
32.5
33.4
33.8
35.0
36.1
35.4
34.9
29.5
28.1
import of goods
-18.4
-21.0
-22.0
-19.8
-20.0
-22.2
-21.8
-20.9
-23.7
-23.2
-21.2
-17.0
-18.5
good trade balance
15.6
15.5
15.5
11.8
12.5
11.2
12.0
14.1
12.4
12.2
13.7
12.5
9.6
source: GKS
Russia’s balance of payments yet to show capital flight in 1Q20. ​The Central Bank of Russia (CBR) data, released on April 10, showed an expected decline in double surpluses: current account surplus fell 35.4% y/y to $21.7bn, while foreign trade surplus fell 32% y/y to $32bn. Both indicators were driven by a significant change in the price of oil – Urals crude price was down 21.5% y/y in January-March period, according to ​BSC Global Markets​ chief economist Vladimir Tikhomirov.
“According to preliminary data from the Bank of Russia, the current account surplus of the balance of payments of the Russian Federation in January-March 2020 decreased by more than a third to $21.7bn ($33.6bn in the first quarter of 2019). The decisive factor was a reduction in the trade balance due to a decrease in export supplies of energy resources amid a negative pricing environment on world commodity markets while maintaining a comparable level of commodity imports. The deteriorating economic situation also affected the foreign trade in services: according to the results of the quarter, according to the Bank of Russia, both exports and imports of services decreased, while the volumes of imports of transport services and services under the “travel” item decreased most noticeably,” the CBR said in a statement on its website.
The drop in the trade volumes was inevitable due to the double whammy of falling oil prices and the coronavirus pandemic, but the good news is foreign investors are not panicking and have hung on to their Russian government bonds for the most part.
“No major capital outflows were recorded,” Tikhomirov said in a note on April 13. “The data also showed that despite market turbulence and uncertainties created by the pandemic, foreign investors are not rushing to dump Russian bonds.”
At the same time Russia has continued to deleverage, like it did in the face of the 2014 oil shock, as companies strive to reduce their exposure to increasingly expensive foreign debt following the devaluation of the ruble in the last month. The deleveraging process has been going on for more than five years and Russian companies already have low levels of debt.
“The current result on operations reflected in the current account of the balance of payments led to net lending by the country to the rest of the world mainly in the form of repayment of external liabilities and placement of financial
53​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com