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3Q12 BoP prints lower CA surplus on lower trade balance and seasonal factors


The CBR has published its BoP estimate for 3Q12. The CA surplus worsened by almost a half to USD 13.0bn in 3Q12 from USD 21.2bn in 2Q12. The trade balance surplus edged down 17.8% YoY to USD 41.2bn on the back of 5.5% QoQ growth in imports and a 5.1% QoQ drop in oil and gas exports. At the same time, the increased deficit in services and second incomes balances was another drag on the current account in 3Q12, which is usual for a third quarter (it is the holiday season and people travel abroad). However, the investment income balance deficit narrowed significantly to USD 10.2bn, from USD 17.2bn, and supported the CA surplus.

Furthermore, net private capital outflow intensified slightly to USD 13.3bn vs. USD 11.6bn in 2Q12, but was still notably lower than in 1Q12 (USD 33.7bn), mainly on the growth in foreign banks’ assets. This brings the 9mo12 figure to USD 58.7bn.

The CBR’s first estimate of 3Q12 shows the CA surplus continued to shrink on seasonal deterioration and a narrower trade balance. We think the higher reading of the net private capital outflow in 3Q12 vs. 2Q12 can primarily be explained by technical factors. First, the above USD 3.0bn FX swaps with the CBR decreased the net liabilities of the banking sector in 3Q12 after increasing them in 2Q12. Another cause for lower capital outflows in 2Q12 and higher in 3Q12 was dividend payments, which were recorded as a jump in foreign liabilities in 2Q12; however, in the last quarter, when they were paid, these transactions led to a decrease in foreign liabilities.

The CBR’s FY12 forecast for net private capital outflow is USD 65bn, which implies a gradual deceleration in the indicator in 4Q12 (to USD 6.3bn). This is in line with our expectations of a further slowdown in the CA balance in October-December on the back of lower oil prices and unfavourable seasonality. RUB is set to remain under pressure. We are reiterating our RUBBASKET and USD/RUB year-end forecasts of 37.5 and 34.12, respectively. 

Maxim Oreshkin, Daria Isakova
VTB Capital analyst

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