Page 67 - RusRPTNov21

5.2.2 Current account dynamics
Russia’s current account of the country's balance of payments continues to strengthen at a record level. According to a preliminary estimate of the Bank of Russia, in January-September 2021, the current account surplus of the balance of payments of the Russian Federation amounted to $82.2bn.
The CBR reported that the key factors pushing up the currency account surplus include:
· the main role continues to be played by the positive trade balance, which increased by $55.7bn to $124.5bn. This was due to the growth in exports of goods in physical terms and a favourable price environment in the world commodity markets. Growth in merchandise imports only partially offset this increase in exports;
· the aggregate deficit of the remaining components of the current account slightly increased mainly as a result of an increase in payments by other sectors of investment income in favour of non-residents amid a gradual recovery in business activity;
· the positive balance of private sector financial transactions markedly (by $19.2bn or 48%) increased and amounted to $59.0bn. Unlike last year, this aggregate was formed almost entirely due to the operations of other sectors on the acquisition of foreign assets;
· international reserves increased by $41.8bn due to foreign exchange transactions carried out in the domestic foreign exchange market within the framework of the budget rule, as well as the receipt by the Russian Federation of special drawing rights (SDR) in the amount of $17.5bn as part of the IMF decision on the new distribution of SDRs among member countries.
CA rose to a record $40bn in 3Q21 vs. $18.2bn in 2Q21 and $23.1bn in 1Q21, beating our and consensus estimates (Bloomberg expected $42bn).
The main improvement vs. 2Q20-3Q20, when the balance was close to zero, came from the c. 70% YoY growth in exports vs. a 30% YoY growth in imports among subdued demand for outbound tourism.
67 RUSSIA Country Report November 2021 www.intellinews.com