Despite the reassuring narrative from The West that Russia faces "costs" and is increasingly "isolated" due to sanctions for its actions in Ukraine, the most recent data suggests reality is quite different. First, capital outflows slowed dramatically in Q3 (from $23.7 billion in Q2 to $13 billion in Q3) with September seeing capital inflows for the first time since Sept 2013. Second, Russia's current account surplus was significantly stronger than expected ($11.4 billion vs $8.8 billion expected) driven by increased trade. Third, and perhaps most crucially, Russia paid down a massive $52.8 billion in foreign debt as Putin "de-dollarizes" at near record pace, reducing external debt to the lowest since 2012.
As Goldman explains, Trade and income improved notably...
The current account balance for Q3 came in at a surplus of US$11.4bn, above consensus expectations of US$8.8bn and up sharply from a small deficit of US$0.7bn in Q3 2013.
On our estimates, on a seasonally-adjusted basis, this now puts the current account at 3.8% of GDP, up from a low point of 1% in Q2 2013 and 1.6% for the full-year 2013.
The improvement in the current account came from both the trade balance, where imports have contracted (due to slowing domestic demand and the weaker Ruble), and from the income balance.
In our view, the latter could be due to either cyclical or structural factors, which are difficult for us to pinpoint, but risks to our current account balance forecasts nonetheless remain to the upside.
Complete story at - "De-Dollarizing" Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter | Zero Hedge
As Goldman explains, Trade and income improved notably...
The current account balance for Q3 came in at a surplus of US$11.4bn, above consensus expectations of US$8.8bn and up sharply from a small deficit of US$0.7bn in Q3 2013.
On our estimates, on a seasonally-adjusted basis, this now puts the current account at 3.8% of GDP, up from a low point of 1% in Q2 2013 and 1.6% for the full-year 2013.
The improvement in the current account came from both the trade balance, where imports have contracted (due to slowing domestic demand and the weaker Ruble), and from the income balance.
In our view, the latter could be due to either cyclical or structural factors, which are difficult for us to pinpoint, but risks to our current account balance forecasts nonetheless remain to the upside.
Complete story at - "De-Dollarizing" Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter | Zero Hedge
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