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in just the third week of March Russia saw an all time record $1.4bn of outflows come its combined equity and bond funds.
The numbers are further distorted by the FX effects of the sharp devaluation of the ruble. The collapse of the oil prices immediately translated into a fall in the ruble’s value from c.RUB62 to the dollar at the end of February to a low of RUB80 only a few weeks later. As revenues are in dollars and rubles and the CBR also has a large share of monetary gold as a reserve, all the leading capital flows and reserves numbers are affected by FX effects as valuations had to be adjusted for the devaluation effects. For example, Russia’s gross international reserves (GIR) fell by $7bn in the first weeks of April, but the actual dollars cash the CBR spent to prop up the ruble was about $2.5bn. The rest of the fall was due to revaluation effects.
“The most interesting thing in the balance of payments is the reduction of oil and gas exports by almost a quarter, primarily due to the warm winter. But Russia's foreign debt by April 1 decreased by 8%, to $450bn, or about 29% of GDP. Here the main reason is the revaluation due to the devaluation of the ruble,” VTB Capital (VTBC) said in a note.
61 RUSSIA Country Report May 2020 www.intellinews.com
