current account surplus of the balance of payments decreased by 7.3 times


According to the Bank of Russia, the current account surplus of the balance of payments in the first half of 2023 decreased to $20.2 billion, which is 7.3 times less than in the same period of 2022. The surplus declined from $14.8 billion in the first quarter to $5.4 billion in the second, and in June 2023 even gave way to a deficit of $1.4 billion for the first time since August 2022 (see chart). “The latter is connected, among other things, with the action of the seasonal factor — the announcement of dividends by Russian companies. This situation has already been observed in similar periods of previous years with an unfavorable price environment for Russian exports,” the Central Bank explains. However, according to analysts of the Solid Numbers Telegram channel, taking into account seasonality, the balance still remained positive – about $1.8 billion.

The main reason for the current account deficit is a decrease in exports and an increase in imports, including tourism services (in January-June 2023, the foreign trade balance in annual terms decreased by 3.3 times, to $54.3 billion). Another reason is the increase in the negative balance of primary and secondary income, which includes interest payments and dividends. “A significant part of the payments is intended for non-residents, therefore it settles on C accounts, without assuming actual outflows in the foreign exchange market. Local investors also do not receive payments on frozen assets, so these are largely “paper” outflows,” Dmitry Polevoy from Lokoinvest explains the impact of this factor on the ruble exchange rate. The reduction in the trade balance / current account surplus automatically slowed down the outflow of capital, they want the structure of flows to be more important here (this data is not yet available), some of which affect the course, and some do not, he adds. On the side of the financial account, a capital inflow of $1 billion was recorded in June, although there was an outflow of $5.7 billion in the second quarter against $78.2 billion in the second quarter of 2022 and $18.4 billion in the first quarter of 2023, Mr. Field.

“Commodity trade flows are relatively stable, therefore, sharp fluctuations in the exchange rate are unlikely to be caused by their dynamics,” the authors of the Solid Numbers Telegram channel note. “The Central Bank’s review of financial market risks confirmed that financial transactions of companies and banks and, to a lesser extent, households and exporters, are behind the sharp depreciation of the ruble in June,” adds Dmitry Polevoy.

Artem Chugunov

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