The balance of payments, russia’s external debt and the Exchange rate of the ruble: a fragile equilibrium

Russia’s balance of payments data for Q3 2015 show a considerable decline in her current account balance. In monetary terms, the decline in imports during Q3 was faster than that in exports (relative to Q3 2014). By comparison with Q2 2015, it even demonstrated a slight increase, notwithstanding the weakening of the ruble in July and August. In Q3, for the first time in five years, Russia saw a noteworthy capital inflow into banks and enterprises resulting from a considerable reduction in the volume of overseas assets (which were sold on a major scale in order to raise funds for looming external debt repayments)and the sale of foreign exchange by the population. On the whole, the trends observed during the period January–September 2015 make it possible to conclude that, unless any new external shocks take place, Russia’s current account balance by the end of 2015 will be large enough to guarantee the stability of the ruble’s exchange rate against major world currencies in spite of the huge external debt repayments to be made at the end of 2015.