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of the budget rule - in the equivalent of up to 3.7 billion rubles. per day from June 7 to July 4 (compared to RUB 5.5 billion in the previous period). At the same time, the Bank of Russia will continue to carry out currency sales operations related to the reflection of other NWF operations (financing the federal budget deficit in 2023 and NWF investments in 2H23), in the equivalent of RUB 11.8 billion. per day until June 28 inclusive.
However, the volume of final currency sales by the Bank of Russia should decrease noticeably in 2H24. In 5M24, net investments of the National Welfare Fund, according to our estimates, decreased to RUB 190 billion. compared to RUB 731 billion. in 2H23. As a result, the volume of currency sales by the Bank of Russia, which is not related to the reflection of NWF operations within the framework of the budget rule, will decrease from the indicated 11.8 billion rubles. to less than 8.0 billion rubles. per day in 2H24 (the exact amount depends on investments in June). Accordingly, the final sales of foreign currency by the Bank of Russia will also decrease. Taken together with other trends in the components of the balance of payments, we believe that this will contribute to a weakening of the national currency exchange rate to 93 rubles/dollar. on average for 2H24.
GDP in April grew by 4.4% y/y after 4.2% in March and by 0.2% month-on-month, excluding seasonality, writes the Ministry of Economic Development. In January-April, GDP grew by 5.1% y/y, while for the whole of 2023 it grew by 3.6%. As before, manufacturing industries, sensitive to budget injections, and trade, sensitive to rising wages, grew at a faster pace.
The already abnormally low unemployment in the economy is falling - another minus 0.1 percentage points, to a new historical low of 2.6% in April.
The volume of Russian and Indian domestic currency settlements via Sber’s infrastructure soared four-fold in Q1 in annual terms, deputy chairman of the bank’s executive board Anatoly Popov said in an interview with TASS before the St. Petersburg International Economic Forum (SPIEF). "It is safe to say already now that payments in domestic currencies turned into an absolutely familiar and clear mechanism over the past couple of years. In 2023, the volume of settlements in rupees/rubles between Russia and India via Sber’s infrastructure climbed 11-fold in annual terms. This year the growth has continued as we saw a four-fold rise in Q1 2024 y/y," he said. The rupee has firmly become the second-largest accounting currency in Sber after the Russian ruble, which is the main accounting currency, Popov added.
Exporters will be left with 40% in foreign currency The Russian government softened the standard for the mandatory sale of foreign currency earnings by the largest exporters from 80% to 60% “taking into account the stabilization of the national currency exchange rate and the achievement of a sufficient level of foreign exchange liquidity.” The ruble weakened immediately after the government's announcement. The calculated
101 RUSSIA Country Report July 2024 www.intellinews.com