Russia's balance of payments goes into the red, a first in three years

Russia’s balance of payments In June reached minus USD 1.4 billion, Russian state news media reported, citing its central bank’s estimates.

The negative balance of payments, for the first time in three years, is due to "the seasonal factor, in particular the announcement of dividends by Russian companies in the event of a drop in export revenues", the Russian central bank said.

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"Such a situation has already been observed in similar periods of previous years when the price environment for Russian exports was unfavourable," it added, assuring this is "not an unusual situation".

A negative current account balance in Russia was last observed in August 2020, when the deficit was USD 1.4 billion, and in June 2020, it was USD 4.4 billion.

In the first half of 2023, the current account surplus in Russia amounted to USD 20.2 billion, which is 7.3 times less than in the same period in 2022 (USD 147.6 billion).

Over the same period, the positive balance of Russian foreign trade in goods decreased by 3.3 times, and its exports of goods were down 32.9 percent. Meanwhile, imports increased by almost 20 percent.

The central bank of Russia says the reduction in the surplus of the foreign trade balance in goods was due to "a decrease in both the physical volume of exports and the deterioration in the price environment for the main Russian exports".

The deficit in the balance of foreign trade in services widened as imports of services resumed, in part due to a pickup in foreign travel by Russian citizens as the tourist season began.

The rouble, Russia’s national currency, has been depreciating since mid-May, a sign Moscow’s claims of the ineffectiveness of Western sanctions might be a mere repudiation.