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

Tyler Durden's picture




 

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...

 

Source: CBR

*  *  *

"Isolated" Indeed!

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Fri, 10/10/2014 - 17:25 | 5316227 Cognitive Dissonance
Cognitive Dissonance's picture

Russia is battening down the hatches for the coming perfect storm.

Fri, 10/10/2014 - 17:26 | 5316230 X.inf.capt
X.inf.capt's picture

them russians sure know how to plan accordingly...

and play the long game of chess...

Fri, 10/10/2014 - 17:32 | 5316254 SafelyGraze
SafelyGraze's picture

I'll take "bulgarian billionaires" for a thousand, Alex

http://en.wikipedia.org/wiki/Category:Bulgarian_billionaires

 

Fri, 10/10/2014 - 19:55 | 5316826 max2205
max2205's picture

When does he dump Treasuries?  Oh wait thats what Belgium is for

Sat, 10/11/2014 - 02:12 | 5317740 7.62x54r
7.62x54r's picture

Dollar denominated Russian debt would be easier to pay off after the dollar crashes. Not sure if this is a good move.

But not having outstanding debt is generally a good idea.

Fri, 10/10/2014 - 19:09 | 5316634 Sudden Debt
Sudden Debt's picture

As Obama would say:
"we've got the right where we want them!"
"We've just picked up the soap and it's ours!!and they can't grab it because they behind us!"
"Suckers!".....

...

Oh dear....

...

Fri, 10/10/2014 - 19:16 | 5316676 WTFRLY
WTFRLY's picture

Agenda 21 land grab? Obama Designates San Gabriel Mountains National Monument
http://wtfrly.com/2014/10/10/agenda-21-land-grab-obama-designates-san-ga...

Fri, 10/10/2014 - 23:22 | 5317457 Amerikan Patriot
Amerikan Patriot's picture

You mean the long game of running the USSR into the ground until it's broken up into 15 separate states (Estonia, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Belarus, Moldova, Ukraine, Armenia, Azerbaijan, Georgia and Russia) and then desperately to reconstitute the USSR as V2.0?

Is that what you meant, Bob?  :-)

Sat, 10/11/2014 - 00:46 | 5317643 Titus
Titus's picture

Amerikan Patriot = Hasabara Shill

Sat, 10/11/2014 - 22:47 | 5319645 Amerikan Patriot
Amerikan Patriot's picture

I've got logic and reasoning.  You've got epithets.  See the difference?

Sun, 10/12/2014 - 03:12 | 5319927 Titus
Titus's picture

Logic based on incorrect inputs is just as bad as no logic.

Really, how much are you getting paid per comment? What about those bots of yours in Siberia?

Sat, 10/11/2014 - 09:57 | 5318075 Volkodav
Volkodav's picture

Soviet is defunct

get over it...

 

you're pathetic

Sat, 10/11/2014 - 22:46 | 5319643 Amerikan Patriot
Amerikan Patriot's picture

Sorry Bob.  Vlad can't 'get over it' and neither can you. Remember, he said that the fall of the SU was the greatest catastrophe of the 20th century. 

Zero Hedgers need to work feverishly to help Vlad re-build the SU and re-populate its gulags.  Rejoice, comrades, the new workers' paradise is nigh!

Sat, 10/11/2014 - 11:18 | 5318184 Dame Ednas Possum
Dame Ednas Possum's picture

Get with the programme shit-for-brains.

You're thinking is 25 years expired.

Sat, 10/11/2014 - 22:51 | 5319654 Amerikan Patriot
Amerikan Patriot's picture

"You're [sic] thinking is 25 years expired."

Bob, Vlad is doing his level best to cobble together what's left of the Soviet Union.  A piece of Georgia here, part of Ukraine there, maybe Estonia or perhaps Kazakhstan if he can swing it.  Won't you help him in reassembling Stalin's lost workers' paradise? 

Just think - you could be put in charge of your very own gulag and house the next generation of Mikhail Khodorkovskys in a distant oblast under Vlad's personal direction!   :-)

Sat, 10/11/2014 - 20:25 | 5319289 pot_and_kettle
pot_and_kettle's picture

Russians don't take a dump without a backup plan

 

 

:-D

Sat, 10/11/2014 - 22:52 | 5319656 Amerikan Patriot
Amerikan Patriot's picture

What was the backup plan for the dissolution of the Soviet state?  Rebuilding it?  :-)

Fri, 10/10/2014 - 17:39 | 5316276 WhackoWarner
WhackoWarner's picture

They know what is coming and that nation knows how to survive.  Right or wrong they have seen this before and have retained a memory.

Fri, 10/10/2014 - 21:40 | 5317147 economics9698
economics9698's picture

So have we.  Several times.

Fri, 10/10/2014 - 23:39 | 5317503 Amerikan Patriot
Amerikan Patriot's picture

Survive?  Russia in its current form has only been around since 1991, Bob.  And even at that, it's shrinking every year. 

Fri, 10/10/2014 - 17:40 | 5316284 Jack Burton
Jack Burton's picture

I agree! The Russian Think Tanks are advising Putin that an ecnomic storm in the west is now a sure bet, unavoidable. Surely nobody can say when, but "if" is now off the table. Russian gold purchases and desire to de-dollar in a managable manner are indications of hatch battening. And Yes, Russia spends a lot of State and Private funds on acedemic and private sector Think Tanks, not ones seeking ways to increase the 1%'s power and wealth and global empire, as USA Think Tanks do. But these have as their commission to learn as much as possible about world ecnomics and geopolitical trends and advise Government and Industry how to cope with what is coming. I heard a couple major Think Tank leaders speak in translation on Russian Websites. Their ability to look logically at events, without any political spin, is refreshing and a bit scary. These guys are not "The Heritage Foundation".

Fri, 10/10/2014 - 17:49 | 5316314 Cognitive Dissonance
Cognitive Dissonance's picture

"Their ability to look logically at events, without any political spin,
is refreshing and a bit scary. These guys are not "The Heritage
Foundation"."

Thier scientists are also more free to explore areas of research the West would never tolerate. While they have their own Cognitive Dissonances to deal with, thinking outside the box is better tolerated in Russia.

Fri, 10/10/2014 - 17:54 | 5316338 JoeSexPack
JoeSexPack's picture

Russians believe abiotic oil theory, meaing oil is from mineral processes, not dead dinosaurs.

 

Only biotic oil theory was allowed in West, so West never drilled too deep.

 

Russkies found oil 6 miles under, where no dino's ever roamed, & are still drilling deeper.

Fri, 10/10/2014 - 18:10 | 5316398 90's Child
90's Child's picture

I'm sure they won't be to willing to public that information if it proves to be correct.

I don't blame them.

Fri, 10/10/2014 - 21:44 | 5317156 economics9698
economics9698's picture

The Russians know the way to win a war is to first kill the fiat. Do you think they really give a fuck about economics?

Fri, 10/10/2014 - 23:42 | 5317511 Amerikan Patriot
Amerikan Patriot's picture

Russia is dependent to this day on Western technology to develop its oil reserves, Bob.

Sat, 10/11/2014 - 00:20 | 5317579 SAT 800
SAT 800's picture

T hat;s impossible and I don't believe it for a minute; as someone who has worked on high level government technology. The first thing they're going to do is make drawings and take material samples of everyt hing; copy every operating system for every seismo-survey piece of equipment; they build better rocket engines than we did for christs sake and you don't think they build their own equipment to drill a hole in t he grouind. Absurd.

Sat, 10/11/2014 - 23:01 | 5319676 Amerikan Patriot
Amerikan Patriot's picture

"That;s [sic] impossible"!

Oh, it's not only not impossible, Bob, it's simply the truth.  E.g., Exxon Mobil is helping Russia develop its Arctic oil reserves using expertise it simply doesn't have on its own.

Maybe spend less time posting here and more working on that GED, huh?   :-)

Sat, 10/11/2014 - 00:21 | 5317583 SAT 800
SAT 800's picture

What youi mistake for "dependent" is expedient. If they want to they will duplicate and improve on every piece of t hat equipment t hat exists and t hey'll do it in 90 days.

Sat, 10/11/2014 - 23:06 | 5319688 Amerikan Patriot
Amerikan Patriot's picture

Bob, certain advanced drilling expertise and techniques are only feasible with American oil companies. 

Given your errors of logic and spelling, I'm thinking that SAT 400 would be a more suitable moniker for you.  At least consider it.

Sat, 10/11/2014 - 00:04 | 5317555 daedon
daedon's picture

After hearing William Engdahl talk about that, the fossil fuel theory sounds rediculous.

Fri, 10/10/2014 - 18:50 | 5316561 Volkodav
Volkodav's picture

Russians can be very clever

and not scared of much

 

Russians normal to evade rules

 

Sat, 10/11/2014 - 00:52 | 5317654 Titus
Titus's picture

Russians normal to evade rules

Exactly. If there's one thing I've learned from the Russians, it's not to fight the rules. Much easeir to go around.

Sat, 10/11/2014 - 09:53 | 5318071 Volkodav
Volkodav's picture

dup 

 like getting around turnstile freepay

 

Fri, 10/10/2014 - 18:55 | 5316578 WhackoWarner
WhackoWarner's picture

YES.

 

Fri, 10/10/2014 - 18:58 | 5316596 WhackoWarner
WhackoWarner's picture

Much as it was not featured in West MSM.  The Sochi Olympics amazed.  I watched them from another view (not a USA USA feed).

 

 

Fri, 10/10/2014 - 19:14 | 5316660 MollyHacker
MollyHacker's picture

Nice Cliché

Fri, 10/10/2014 - 17:53 | 5316333 saints51
saints51's picture

Yeah but don't let them fool you either. They have masters who they are looking out for. What we see now is the elites have fleeced all the middle class worldwide. Now the snake is eating its tail. Its just groups of elites after other groups of elites. This is what we are witnessing. All of them are a big pile of shit and do not have the people's best interest in mind. People like us are the one's who defend thy neighbor,not them.

Fri, 10/10/2014 - 21:00 | 5317027 petkovplamen
petkovplamen's picture

If there is sure to be an economic storm in the West/USA then the question really is when will USA start WWIII to make sure it happens BEFORE the economic storm.

Fri, 10/10/2014 - 21:45 | 5317165 economics9698
economics9698's picture

Better start it quick.

Fri, 10/10/2014 - 19:40 | 5316762 White Owl
White Owl's picture

They don't have those un-registered and non-reporting gold and silver mines in Siberia for nothing. Think about it.....

Sat, 10/11/2014 - 00:25 | 5317591 SAT 800
SAT 800's picture

I often think about it; and post about it. It's a government priority program; they pay high wages and benefits; they t ake their pick of the workers and they're working shifts; pounding the piss out of those hard rock deposits in Siberia; and none of it is reported anywhere. Officially, it doesn't even exist.

Fri, 10/10/2014 - 23:23 | 5317463 Amerikan Patriot
Amerikan Patriot's picture

It looks like it's 'battening down' the ruble as well.   :-)

Fri, 10/10/2014 - 17:29 | 5316241 Big Ben
Big Ben's picture

I was in Crete a couple months ago and one of the tour guides mentioned that last year the island was crawling with Russian tourists who bought up everything. She said she had problems finding shoes in the stores because the Russians had bought them all.

This year however, there are only a few Russian tourists.

Fri, 10/10/2014 - 17:31 | 5316253 BlindMonkey
BlindMonkey's picture

Why go to Crete when they have just annexed hundreds of miles of beautiful shoreline?  Keep the spending domestic when you can.

Fri, 10/10/2014 - 17:47 | 5316305 Big Ben
Big Ben's picture

Food is much better there. They use fresh ingredients and it makes all the difference.

Fri, 10/10/2014 - 18:10 | 5316383 SilvertonguedAngel
SilvertonguedAngel's picture

Russia didn't annex anything.

Crimea had a referendum.

Fri, 10/10/2014 - 18:47 | 5316545 Volkodav
Volkodav's picture

Yes

Crimea is still celebrating.

Fri, 10/10/2014 - 21:26 | 5317106 BlindMonkey
BlindMonkey's picture

Huh?? Crimea had a referendum, applied for annexation to Russia and was accepted by the Duma. Feel free to correct my recollection but it was annexed.

Sat, 10/11/2014 - 00:18 | 5317575 BlindMonkey
BlindMonkey's picture

Ok. I looked at the down votes and went back trough the news. Annexation was a western term indicating a hostile poetical action.

It was actually a treaty of accession. Crimea applied by treaty to be a member and the Duma accepted.

I stand corrected on technical terms.

http://rt.com/news/putin-speech-crimea-reactions-606/

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