Page 41 - RusRPTFeb20

5.2.2​ Current account dynamics
Russia’s current account surplus remained above $70bn in 2019.
The CBR published preliminary data on the state of Russia’s external accounts in 2019 on January 17, showing a current account surplus of $70.6bn (-38% y/y), net capital outflow at $26.7bn (-42.4% y/y), foreign trade surplus at $163.1bn (-16.1% y/y) and FDI in non-financial assets of $26.9bn (+450% y/y).
Softer data on c/a and trade balance stems from the weaker oil price – expected and, moreover, offset by a sharp rise in investment inflows and a significant drop in net capital outflows.
The drop in trade surplus was driven by lower crude oil prices (Brent was down 9.1% y/y); this factor, along with an increase in investment capital outflows, pushed c/a down y/y. However, last year there was a major upward reversal in foreign purchases of Russia’s government debt: such purchases totalled $22.2bn vs -$5.3bn recorded in 2018.
The deleveraging by companies of recent years continued while FX interventions boosted reserves.
The decline in c/a volume might have been larger if it were not for the CBR’s and the Minfin’s FX interventions. According to the CBR, Russia’s international reserves grew $66.bn in 2019 (vs $38.2bn in 2018) and the bulk of this increase was purchases of FX for the Minfin.
This allowed the RUB rate to remain stable and capped growth in imports: the latter rose 2.5% y/y vs a drop of 5.7% in the volume of exports.
In the meantime, deleveraging in the Russian private sector continued, led by
41​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com