Russia’s capital outflows more than halved in the first quarter from the previous three months, even as departing funds continued to pose a challenge for an economy facing recession, falling oil prices and sanctions over Ukraine.
Net private capital outflows, swollen by foreign debt redemptions, were $32.6 billion from January through March, the 23rd consecutive negative quarter, according to initial estimates published by the central bank late on Thursday. That compares with $72.9 billion in the prior three months.
Russia’s economy, entering its first recession since 2009, is losing capital amid a decline in oil prices and the country’s worst standoff with the U.S. and its allies over its role in Ukrainian crisis, which has led to sanctions that have crimped access to international markets. The Bank of Russia has started foreign-currency repurchase agreements and swaps with banks to ease demand for currencies amid worst ruble’s crisis since 1998.
“The capital outflows are mainly driven by the redemption of foreign debt,” Vladimir Osakovskiy, the chief economist for Russia at Bank of America Corp., said by e-mail. “The peak of repayments this year has already passed.”
Outflows, adjusted for the central bank’s foreign-currency operations with lenders, were $23.4 billion.
The current account, the broadest measure of trade in goods and services with the world, showed a surplus of $23.5 billion in the first quarter, 9 percent down from a year earlier, according to the central bank’s estimates. Economists had projected a surplus of $25.4 billion, according to the median estimate in a Bloomberg survey.
A 30 percent drop in exports to $86.6 billion was offset by slump in imports, which fell more than by a third to $46.2 billion, the data showed.
The current account surplus is “quite positive indication of persistent fundamental support to the ruble, despite much weaker oil prices,” Osakovskiy said.
The Russian currency, which plunged 46 percent last year to become the second-worst performer after the Ukrainian hryvnia, has turned a corner in 2015, notching the strongest performance against the dollar. The ruble gained 1.3 percent to 51.2070 as of 10:22 a.m. in Moscow.
The central bank estimates current account surplus will increase to $64 billion this year and to $90 billion next year from $59.5 billion in 2014, Bank of Russia Governor Elvira Nabiullina said March 13.