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boosted by IMF special drawing rights (SDRs) that were distributed in August to the central banks of IMF member countries to help with their COVID recoveries. The value of Russia’s share in this SDR allocation was $17.5bn. As of end-September, the value of Russia’s foreign currency and gold reserves stood at $614bn (about 40% of GDP).
Capital outflows from Russia increased rapidly in July-September. The net outflow of private sector capital amounted to $34bn, the largest net outflow in three years. The outflow was mainly driven by foreign investments and lending of non-bank corporates. The total private sector net capital outflows for the last four quarters corresponds to about 4% of GDP.
Non-oil exports drove Russia’s current account balance to a historical quarterly high of $40.8bn in the third quarter, the CBR reported on October 11. “The $40.8bn CA surplus increased net foreign assets by $26bn (of mostly corporates in the form of direct investment and trade credits) and foreign reserves by $12.9bn (the rest is errors and omissions),” Isakov said. “Another $16.7bn of the increase in foreign reserves came through the [IMF’s SDR allocation, which enlarged the CBR's foreign liabilities accordingly.”
The rapidly improving state of Russia’s trade regime has already had a visible knock on effect on the ruble, which has strengthened considerably this year and is one of the world’s best performing currencies this year.
According to Vedomosti, Russia’s exports will surpass $500 billion this year for the first time since 2013, citing a Citi study. Experts noted in a study note that exports are already nearing their best levels in years, and basic commodity prices are rising.
According to Citi analysts, the increase in Russian exports is due to a surge in commodity prices, particularly in the oil and gas sectors. On September 30, the Brent crude price reached $78 per barrel, a level last seen in October 2018.
Gas prices continue to set new highs. Furthermore, Russia’s Federal State Statistics Service previously stated that the nation’s export of metals and metal commodities rose in July prior to the imposition of export tariffs. According to the Federal Customs Service, aluminum exports increased to $7.4 billion in July, a 16-fold increase over the same month previous year.
According to Alexander Daniltsev, Director of the Higher School of Economics’ Trade Policy Institute, exports will continue to increase this year as the global economy improves and energy prices rise.
However, he believes that the pace will decrease towards the end of the year because, if the winter is not exceptionally cold, fuel costs will face downward pressure.
In any event, provided the world economy does not enter another phase of stagnation, Russian exports will continue to rise in 2022, although at a slower pace, according to Daniltsev.
61 RUSSIA Country Report November 2021 www.intellinews.com