Russia's Banking System Sees Major Foreign Currency Inflow
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Russia’s banking system saw an unusually large inflow of foreign currency in September, with client accounts rising by $13.6 billion, according to data from the country’s Central Bank.
While the authorities have not confirmed the source of the inflow, market experts say the surge was likely driven by Rosneft, Russia’s state-owned oil company, which may have received another advance payment under its long-term oil supply contract with its Chinese counterpart, CNPC.The deal, signed in 2013, covers more than 300 million tons of oil over 25 years and includes partial prepayment.
This year’s advance, paid in yuan, is estimated at $12 billion, roughly equivalent to 1 trillion rubles.
The inflow coincided with unusual movements in the money supply, as the total amount of rubles held in bank accounts slightly declined by 0.2%, while holdings in foreign currency accounts grew by 1.1%.
Pattern similar to past payments
Economists say such a surge could only come from large external inflows, such as advance payments under export contracts.“For this to happen, large foreign currency advances or other external resources must have entered the economy,” economist Yegor Susin told independent Russian outlet The Moscow Times.
Susin suggested this could be Rosneft’s five-year advance, consistent with previous payments in 2015 and 2020. Between 2013 and 2015, the oil giant received similar advances from CNPC, totaling $35 billion.
For the Russian currency market, $12 billion is a substantial sum, especially as the country’s 29 largest exporters have been selling less foreign currency domestically. In September, net sales by these firms dropped to $5 billion, down from $10 billion per month earlier this year.
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