The current account surplus to be record high in 2021

RUSSIA ECONOMICS - In Brief 09 Dec 2021 by Alexander Kudrin
The CBR published its flash estimate of the 11M21 current account surplus and the trade balance. The former widened from $94.4bn in 10M21 to $111.4bn. The latter increased to $162.8 bn. In 2021 as a whole, the current account will likely reach $128bn (if not more) therefore beating the historical record seen in 2018 ($115.7bn). As the ruble remains comfortably weak, the oil price denominated in rubles reached the highest ever level. Not least, the ruble remains relatively weak due to permanently discussed “booster” sanctions to be offered to Russia. As a result, the Russian budget is heading toward surplus in 2021 as a whole, despite amended expenditures (by nearly 12% against the initial budget plan). The surplus will likely widen in 2022 (see more on this issue in the forthcoming Forecast report).Given strong oil-and-gas revenue flow, the Finance Ministry announced that in line with the fiscal rule, it would spend over R0.5trln rubles from December 7 to January 13 for topping up international reserves by purchasing FX and gold. Daily interventions accounting for around R22bn will keep liquidity flowing into the system. Therefore, returning the budget surplus that absorbs the liquidity.Evgeny GavrilenkovAlexander Kudrin

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