‘De-Dollarizing’ Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter

“De-Dollarizing” Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter (ZeroHedge, Oct 10, 2014):

Despite the reassuring narrative from The West that Russia faces “costs” and is increasingly “isolated” due to sanctions for its actions in Ukraine, the most recent data suggests reality is quite different. First, capital outflows slowed dramatically in Q3 (from $23.7 billion in Q2 to $13 billion in Q3) with September seeing capital inflows for the first time since Sept 2013. Second, Russia’s current account surplus was significantly stronger than expected ($11.4 billion vs $8.8 billion expected) driven by increased trade. Third, and perhaps most crucially, Russia paid down a massive $52.8 billion in foreign debt as Putin “de-dollarizes” at near record pace, reducing external debt to the lowest since 2012.

As Goldman explains, Trade and income improved notably…

The current account balance for Q3 came in at a surplus of US$11.4bn, above consensus expectations of US$8.8bn and up sharply from a small deficit of US$0.7bn in Q3 2013.

On our estimates, on a seasonally-adjusted basis, this now puts the current account at 3.8% of GDP, up from a low point of 1% in Q2 2013 and 1.6% for the full-year 2013.

The improvement in the current account came from both the trade balance, where imports have contracted (due to slowing domestic demand and the weaker Ruble), and from the income balance.

In our view, the latter could be due to either cyclical or structural factors, which are difficult for us to pinpoint, but risks to our current account balance forecasts nonetheless remain to the upside.

Meanwhile,

Net private capital outflows stood at US$13bn for the quarter, up slightly from US$10bn in Q3 2013 and similar to the pattern seen in Q2.

*RUSSIA 3Q CAPITAL OUTFLOWS SLOW TO $13B VS $23.7B OUTFLOW IN 2Q

*RUSSIA HAD $11.6B NET CAPITAL INFLOW IN JUNE: CENTRAL BANK

June was first monthly net inflow since Sept. 2013, according to central bank statement. 

And finally – “de-dollarization” accelerates as Russia pays down its foreign debt at the fastest pace since Lehman…

20141010_russia1

ce: CBR

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“Isolated” Indeed!

 

4 thoughts on “‘De-Dollarizing’ Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter

  1. It is the US and EU who are isolated by BRICS and their accompanying members.
    67% of the world has de-dollarized, only 33% left, and I wonder what the percentage makes ups the EU.
    The idea the US purports they still have world power is absurd beyond belief.
    The only ones who believe it are the fools who get their news from US media.
    Putin has executed a world war without raising a single rifle or dropping one bomb…….all in a quiet and methodical way………using the US’s complete lack of respect for it’s responsibility as a world reserve currency against it.
    The US and the EU are mired in debt.
    All money is going east…….it has been obvious to me since it started in 2010.

    The FED is a private bank, and has withdrawn it’s $80 billion a month to underwrite the greedy guts as of next week……..lets see what the markets do. The FED is a private bank.

    The next problem…….How much longer will the FED underwrite the US national debt?

  2. I sure wish Putin were working on our side.
    All he needs is a meeting with Putin in a kitchen with Richard Nixon, and instead of using his shoe, he can use his wallet to hit the counter……….

  3. $53 billion repayment in 90 days……while the US shows huge losses in hundreds of millions……and the US claims to be hurting Russia?
    Are these guys on some kind of great drug? If they are, I’d sure like some……..awful is good, bad is good, losses are good……..I grew up in a time when nobody thought like this…..it is psychotic.

    I really dislike being on the losing side, but we are, this is why they are starting with the martial law and everything else………Americans hate losing. When the dollar collapses, it will be a nightmare.

    From 1929-1933, the US markets lost 90% of their value. Since nearly 90% of all transactions are now High Frequency skim and sell……..the number probably won’t be much different.

    People need to realize the FED is a private bank, and it does not serve the US government. It appears to me they are cutting their losses. Bankers have no sense of nation or belonging, it is all about profits. They were going to keep QE going through 2016. Then, mid 2015, now, it is next week.

    This will rock the EU and US markets. The EU has backed the loser this time. Their fool sanctions on a nation from which they earned E120 billion a year were insane. Who bites the hand that feeds them? Most of us figure that out fairly early in life……kittens and puppies figure it out before they are adults if they get proper care and training….

    I will be interested to see what happens in the eastern markets…..will they go up? Putin is a financial genius, not all chess players are, but the Russians were lucky to get one who is both. Chess is more than a war game, it is all about how to win………

    The EU was not put together properly. If they had put in a simple rule that majority rules, no sanctions would have been put in place against Putin, and the E120 billion would still be flowing into their markets and their laws would have kept Obama off their backs. Instead, they are suffering mightily.

    The idea that 4 nations could do such damage, when all the other members would not shows a fatal weakness in the EU model, they put it together too quickly without thinking it through.

    They have 18 voting members, and 10 more members who are affiliated, but not voters……I think. If someone knows better, please advise. But the fact four states could mess up all 28 members of the EU is madness.

    The US stock market has about 10-15% of real investors. and most are just sitting, not investing. We don’t know how many played on margin, or other stuff…..but I think the 10% is about right…….90% of the market are greedy gut skim artists.

    The next big problem for the US that I see coming from the FED is one nobody wants to hear or discuss………What happens when the FED decides to cut their losses completely, and stop paying the interest on the National Debt that keeps it current? The numbers are huge…….? The FED isn’t American, it is a bank, with connections around the world.

    When companies lose their nationality, they lose touch with the national economy and it’s purpose and future. When I grew up and worked in the marketplace, companies (even corporations) were national, and nation oriented. It was after the Coup of 2000 when it changed radically, and corporations became the monsters they are today. Thinking globally might be good for economists, but not for leaders or business……..I can give you example after example why that model does not work.

    I will give one quick story. A corporation that provides needed supplies to most folks has embraced the idea that all profits go to them, none to the chain members. They no longer offer franchises, all decisions, all profits go to and from the top. As a result, someone running a store in Palo Alto, CA, has to wait for corporate decisions from headquarters across the country before they can hire or fire someone. This is micro management on an excessive scale.

    This place has a manager without power (all are managers, all work at penny wages, none have any authority) who has been openly stealing from inventory and cash for a year. Corporate headquarters still has not given the site manager the okay to get rid of him. As a result, they continue to lose thousands of dollars in supplies, and cash each month. The thief knows the site manager can do nothing.

    It affect morale and it invites others (all underpaid and overworked) to follow course. It is a greedy and insane way to do business. People who work for pennies and see the profits that come in every day are bound to feel some envy. Even folks like me who have an overactive conscience and could not do that……I would be looking for another job every day……..it would disgust and anger me beyond belief.

    These companies that are so greedy also push for what Greenspan called high productivity. That means fewer people do the work more used to do. Some run at 50-60% employment level, working their managers to death. It burns them out, they lose them, and then cry they cannot find the right people.

    Greed kills, it really does. Treating people like machines isn’t the answer. Human resources, if fed and grown properly, can make a business flower. Hell holes only make them seek better employment.

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