According to the Bank of Russia, the surplus on the current account of the balance of payments in January—April 2020 fell to $23.5 billion from $40.1 billion a year earlier, fully into the outflow of private capital of $23.9 billion In April, the index remained in a weak positive territory, and the ruble was supported securities conversion of the Fund to buy the White house of Sberbank, the return of investors in the OFZ and the likely sharp contraction of the negative balance of operations on the payment of dividends and trade in services. Although the consensus forecast assumes a gradual strengthening of the ruble in the second quarter of 2020 and beyond, some analysts foresee it loosening up to 80 RUB/$ at the background of the normalization of Central Bank sales of the currency.The decline in current account surplus of the balance of payments by almost half in annual terms in January—April 2020 “has identified serious weakening of the trade balance, particularly noticeable in April, due to the rapid compression of exports due to deterioration in aggregate external demand and the unprecedented downturn in the international market of hydrocarbons,” explained the regulator. The foreign trade surplus in January—April fell to $35.6 billion versus $61.6 billion a year ago.The decline in the average price of Urals oil of $56 per barrel in February to $30 in March and $16 in April, likely could make the current account balance deficit in April, but that didn’t happen. According to economists at ING, the monthly current account surplus declined from $6-10 billion in the first quarter to $1.5 billion in April, “in fact in line with seasonality”. From the failure rate kept improving traditional non-oil current account deficit by reducing imports of goods and services, as well as reducing the outflow of dividends. The analysts of Raiffeisenbank noted that imports of services will recover slowly, but due to the large volume of corporate profits in 2019, the payment of dividends in 2020, “despite the partial cancellation and transfers” will be significant. “Last year the residents were paid about $74 billion, and this, according to our estimation, can be paid $50 billion, which will put pressure on the balance of the current account: in the summer months, as we expect, it will go into the negative zone”, they say.Although the reduced surplus in the current account in April was fully offset by sales of foreign currency securities, which rose from $1.1 billion in March to $4.8 billion in April (including due to the conversion of the Fund’s assets for acquiring government stake in Sberbank received the White house as the profit of the Central Bank from the transaction, the ruble has already covered the budget deficit, see “Kommersant” on 18 may), and the restoration of the flow of money in the OFZ (after the sharp outflow of $3.7 billion in March — in April, the OFZ was returned to $0.7 billion, according to the regulator), account Kapi��scarlet has deteriorated sharply (see chart). If in January—April 2019 total private capital outflow from Russia $27.6 billion was much smaller than the current account surplus in January—April 2020 even exceeded it, and in April accelerated to $6.9 billion from $4.3 billion in March, estimated at ING. “Although the overall rate of outflow is not critical, we surprised him up to speed on the background of the apparently relaxed behaviour of the population in the currency market”,— analysts of Bank, linking such acceleration in the best case scenario with the repayment of corporate external debt, and at worst — with a preference for companies with foreign assets, “that can reduce the effectiveness of foreign exchange interventions of the Central Bank”.Although macroeconomic consensus forecast development centre HSE, made on the basis of interviews with 6 to 12 may, suggests that by 2022 the price of Urals crude oil will again reach $50 per barrel and remain at that comfortable level in subsequent years, and the rouble is expected to actually stable at 72-73 RUB/$, Raiffeisenbank convinced: “factors for the strengthening of the ruble is not.” The removal of the greater part of the restrictive measures of the Russian Federation in June will resume growth in imports. Cheap oil and the exhaustion of the stock of liquid foreign currency assets in the banking sector Bank economists expect the weakening of the ruble in the summer (above 80 RUB/$). This will contribute to expansionary monetary policy and reduction of intervention of the Central Bank to the level of regular.Alexey Shapovalov
