Russia’s current account surplus extended gains in May to reach $35.8bn, an increase of a quarter compared to January-May 2020 and up on the $28.1bn posted in April, according to the Central Bank of Russia (CBR). The surplus is feeding international reserves, which hit an all-time high of $605bn as of the start of June.

The growth in the trade surplus was due to a more active recovery in the volume of exports of goods compared to imports, the CBR said. With oil price above $75 per barrel the trade balance is running significantly ahead of forecasts and adding earnings to Russia’s foreign exchange reserves, which are over $600bn for the first time ever now. The reduction in the negative balance of services as a result of persistent restrictions on international tourist travel also played a significant role in strengthening the current account.

The positive balance of financial transactions in the private sector in January-May 2021 was at a lower level than a year earlier and amounted to $24.6bn. In contrast to the trend of previous years, the contribution of the banking sector to the dynamics of the indicator was relatively small, the CBR said in a regular update. Operations of other sectors, aimed both at reducing liabilities to non-residents and at increasing investments in financial assets abroad, became decisive.

The country's international reserves grew by $12.7bn as a result of foreign exchange purchases within the framework of the fiscal rule and the management of reserve assets. Russia’s gross international reserves (GIR) were $605.2bn as of June 1.  

 

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