The surplus, roughly the difference between exports and imports, recovered from a two-year low of $9.6-billion in the second quarter, preliminary data published on Tuesday by the Bank of Russia showed. It was close to double the median forecast of $8.6-billion among economists surveyed by Bloomberg. 

Still, with Russia’s economy adapting to unprecedented international sanctions over its war in Ukraine, the surplus remains far below levels recorded last year. It reached $40.9-billion in the first nine months of this year, compared with $196-billion in the same period of 2022, underlining pressure on the ruble from diminishing foreign currency earnings.

The central bank expects Russia to record a current-account surplus of just $45-billion this year and $50 billion in 2024. 

An increase in exports in August and September helped improve the current-account balance, while the level of imports didn’t change significantly during the quarter compared with the previous three months, the bank said in a statement. 

That’s a reversal on the situation in the first half of the year, when policymakers noted a decline in export volumes and prices while imports increased. 

What Bloomberg Economics says…

“A higher oil price boosted Russia’s exports, but failed to support the value of its currency. In order to stop the ruble rout the Bank of Russia will need to further raise the policy rate and cool credit growth. At the moment, money markets expect the policy rate to peak at 15.5% in 1Q 2024. The central bank would likely need to meet these expectations to stop the ruble’s decline at the cost of a higher risk of recession in 2024.” – Alexander Isakov, Russia economist.

Budget proceeds from oil and gas sales rose in September by 7.5% from a year earlier. 

Russia’s Urals blend traded at an average $83.08 a barrel, up more than 20% year-on-year and exceeding the price cap for a third straight month that the Group of Seven nations imposed to try to limit the Kremlin’s war chest. Oil and gas industries contribute about a third of Russia’s total budget revenue. 

The central bank has highlighted deteriorating foreign trade conditions as a key factor in the ruble’s recent slump. The currency weakened by more than 25% since the beginning of the year, the worst performance among emerging markets behind only the Turkish lira and Argentina’s peso.