Ministry of Finance increases foreign exchange interventions // Monitoring of public finance

The Ministry of Finance yesterday announced an increase in the volume of purchases of foreign exchange and gold within the framework of the “budget rule” from 221 billion rubles. ($ 3 billion) in June to 296 billion rubles. ($ 4 billion) in July, which is close to early 2020 levels (see chart). The reason for this increase is the growth of additional oil and gas revenues, which should be neutral for the ruble. “For the ruble, oil prices remain a factor of support. The price of Brent remains above $ 76 per barrel, which is the highest level since October 2018, ”said Yuri Kravchenko, Head of Banks and Money Market Analysis Department at Veles Capital.

ING, having improved its forecast for the average annual oil price in 2021 from $ 62.5 to $ 66 per barrel, expects that the current account surplus of the balance of payments will accordingly increase from $ 55 billion to $ 65 billion – and this additional $ 10 billion will be largely sterilized by interventions, and the Ministry of Finance will buy $ 33 billion in foreign currency over the year. “The actual volume of purchases of foreign currency for the year could be reduced by $ 3-5 billion if the government succeeds in completing a plan to annually invest a similar amount from the National Wealth Fund in 2021-2023,” the chief economist notes bank Dmitry Dolgin.

Thus, the entire increase in the balance of payments due to the rise in prices and higher oil exports will be bought by the Ministry of Finance, but ING sees risks of deterioration in its non-oil and gas part in the second half of the year due to the accelerated growth of imports and the opening of some tourist destinations. “As a result, the reduction in the monthly current account surplus from $ 5-10 billion in the first half to $ 3-5 billion in the second, amid stable purchases of foreign currency, may expose the local foreign exchange market to risks associated with the capital account,” the bank’s analysts say.

The volatility of the ruble exchange rate and the increase in the volume of dividend payments and their concentration in June-August will increase, says Sergey Konygin, senior economist at Sinara investment bank. “Russian companies are going to allocate 1.8 trillion rubles for these purposes. (about $ 25.3 billion, an increase of 22% year on year). This year, the summer season of dividend payments will be more concentrated than last, when dividend payments of state banks were postponed to autumn, ”he notes.

Alexey Shapovalov

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