Russia: Small current account surplus in Q2
Overview:
The Russian balance of payments showed further signs of stabilising in Q2. The current account recorded a small surplus similar to that seen in the previous two quarters. However, the capital account returned to a modest surplus after a huge outflow in Q4 2008 and a smaller one in Q1 2009. As a result foreign exchange reserves rose over by US$21.2 bn during the second quarter having fallen by US$131 bn in Q4 2008 and by US$31 bn in Q1 2009. They now stand at over US$400 billion once more. At the same time, the ruble continues to strengthen against the Euro/US$ basket. Having depreciated sharply to 39.5 to the basket at its weakest (but well within the 41 upper limit), the ruble strengthened to 36.6 in June. So while Russia continues to face a severe economic downturn, financial markets are stabilising.