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Trade surplus weakened in May — to narrow further on lower oil prices in June

According to the CBR, the trade surplus has continued to shrink, decreasing to USD 17.4bn in May, from USD 18.9bn in April. Export volumes declined a marginal 0.8% MoM (but were up 3.5% YoY) bringing May’s reading to USD 45.2bn. At the same time, imports were back on track, adding 4.3% MoM to USD 27.8bn in May (while the pace of the negative YoY growth decreased from -1.7% YoY in April to -1.4% YoY in May).

Exports in May did not show any significant drop in oil prices during that month (average Urals declined 7.7% MoM in May to USD 109/bbl, from USD 118/bbl in April) due to advanced contracts in the sector. However, oil prices kept softening in June and we expect export figures to come much lower next month. We still think that the low (and even negative in past two months) annual growth of imports is misleading due to the high base effect and expect growth rates to rebound soon. Hence, we think that the trade balance likely worsened in June towards USD 15bn. This process is set to continue in the coming months supported by unfavourable seasonality. As a result, we think that the trade balance could decline towards USD 10bn in July-August, bringing the current account surplus closer to the breakeven point. That would add significant downward pressure on RUB in 3Q12 (we expect the dualcurrency basket to reach RUB 37.0 at the end of September).

Maxim Oreshkin, Daria Isakova
VTB Capital analyst

oil, CBR

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