Russia’s economy continues to grow amidst war and Western sanctions. Photo/Reuters
MOSCOW – Russia’s current account surplus has risen sharply, supporting the national currency as energy exports recover despite pressure from Western sanctions.
The current account balance, which measures the difference between money coming into the country through trade, investment and transfers versus funds going out, amounted to USD 53.8 billion or IDR 834 trillion in the first ten months of this year.
October’s surplus exceeded $11 billion for the second month in a row after reaching the highest level this year in September. The central bank revised its current account forecast for the full year up from USD45 billion to USD60 billion due to soaring oil prices.
Moscow’s revenue from oil and gas sales surged to its highest level in a year and a half, reaching $17.7 billion last month despite forecasts of a large deficit.
“New data shows Russia continues to benefit from high commodity export earnings. “We estimate that Russia will again post a current account surplus of USD 20 billion in the remaining two months of 2023, bringing the overall external balance to around USD 75 billion,” predicted Bloomberg Russian economist Alex Isakov.
“The increase in export earnings helped stop the ruble from weakening, but in the coming months the Russian currency may be tested as the government rebuilds its foreign exchange reserves starting in January,” he added.
This comes after Moscow shifted most of its trade flows eastward after Western sanctions disrupted most supply chains in European markets.
Russian authorities reimposed some capital controls requiring exporters, including major oil producers, to sell their earnings from foreign trade in the domestic market to secure foreign currency inflows.
The move helped provide support to the ruble, which strengthened about 5% against the US dollar in October. The currency continued to strengthen this week to below 89 against the greenback for the first time since late July.