Russia’s private sector capital outflow in January-March stood at $15.4bn, almost double the amount of the first quarter oof 2016, according to Central Bank of Russia (CBR). The first quarter figure is already close to the CBR’s $16bn estimate for the full year in 2017.

The capital outflow increased notably compared with $8.8bn seen for the same quarter of 2016, mostly due to higher outflow in the banking sector. Other real sectors have been net importers of capital in the reporting quarter, the CBR noted.

The central bank previously estimated that net capital outflow in 2017 would not exceed $13bn, as the corporate foreign debt refinancing lowers. However, the capital outflow in the first quarter has undermined this outlook and also brought the overweight ruble rate into question.

The key contributor to capital outflow was the unusual $19.2bn increase in banks’ foreign assets – likely due to some large one-off deals (i.e. loans to finance the Rosneft share purchase). “Other sectors” (i.e. corporates) recorded an almost $6.8bn capital inflow (also unusual, compared with the $8.5bn outflow in January-March 2016, and $18.5bn outflow for the whole of 2016).

“The CBR data is evidence that a strong current account surplus was one of the factors that supported the RUB in 1Q17. This support is likely to diminish substantially in subsequent months: the 1Q17 figure contributes approximately 75% of the CBR’s estimate (recently reviewed) of the total CA surplus for 2017. In this respect, we think that recent economics ministry forecasts of RUB weakening in the medium term have strong grounds,” VTB Capital wrote in a note.