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Banking in Russia
1. [Enter reference here]
04/02/2014 17:58
Russian economy
How to change this “new normality”?
Dmitry Polevoy, PhD
Chief Economist, Russia & CIS
Moscow
February 2013
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04/02/2014 17:58
Russia – the 6th largest economy globally
25%
2000
2012
20%
15%
A rise from 2.6% to 3%
10%
5%
0%
Source: IMF
7 January 2009
2
4. 2013-18 expected GDP, %YoY
Slower expected GDP growth – a story of
higher wealth, but only partly
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04/02/2014 17:58
8%
CHN
7%
6%
KAZ
5% IND
TUR
4%
ZAF
3%
MEX
POL CZE
BRA
2%
BGR
UKR
1%
KOR
RUS
JPN
HUN
0%
0
10000
20000
30000
40000
GDP per capita, US$ PPP
Source: IMF
7 January 2009
3
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04/02/2014 17:58
2000-08 avg. CPI growth
Historically high inflation was a natural pay
for rapid economic growth before the crisis…
30%
TUR
25%
20%
RUS
15%
10%
HUN
UKR
BRA
5%
0%
BGR
ZAF
MEX POL
KOR
KAZ
IND
CZE
CHN
-5%
2%
3%
4%
5%
6%
7%
8%
9%
10% 11% 12%
2000-08 avg. GDP growth
Source: IMF
7 January 2009
4
6. 2010-13 vs 2000-08 CPI
…but now slower growth serves as key
disinflationary factor in many countries
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04/02/2014 17:58
10%
5%
CHN
KOR BRA
CZE
0%
BGR
-5%
-10%
IND
RUS
KAZ
HUN
ZAF
JPN
MEX
POL
UKR
-15%
TUR
-20%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
2010-13 vs 2000-08 GDP
Source: IMF
7 January 2009
5
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04/02/2014 17:58
2010-13 vs 2000-08 CPI
Inflation vs Unemployment – a mixed pattern
10%
5%
CHN
KOR
0%
-5%
BRA
POL
CZE
KAZ
RUS
-10%
ZAF
MEX
BGR
UKR
-15%
TUR
-20%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
2010-13 vs 2000-08 unemployment
Source: IMF
7 January 2009
6
8. 2000-13 avg. budget balance
Russia still has superior government
budget/debt metrics (% of GDP)
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04/02/2014 17:58
5%
KAZ
RUS
BGR
0%
KOR
ZAF
MEX
CZE
CHN TUR
POL
UKR
-5%
BRA
HUN
IND
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Gross public debt, 2013F
Source: IMF
7 January 2009
7
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04/02/2014 17:58
GDP: Even 2% looks good now for Russia…
15
12 GDP growth slowed from 3.4% to 1.3% in 2013
GDP growth by key components
10
8
5
4
0
0
-5
-10
Contribution to GDP, ppt
-4
-8
-15
Priv. cons-n
Inventories
Gov. cons-n
Net export
Investments
GDP,%YoY (rhs)
PMI composite index flags GDP growth at 2% at best
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
60.0
57.5
55.0
52.5
50.0
47.5
45.0
42.5
40.0
37.5
35.0
PMI composite
7 January 2009
despite remaining consumption growth GDP,
which totally added 2.3ppt…
…while other items dragged GDP down –
inventories (-0.8ppt), net exports (-0.2ppt) and
investments (-0.1ppt).
Zero contribution of the public consumption to
GDP looks extremely challenging, especially
under mounting calls for extra fiscal boost
Our base-case forecast has been 2.3% for
2014, while downside risks are mounting with
something near 1% looking as the worst-case
4Q13 rise in PMI indices seems to haven’t
translated into stronger GDP expansion and
weak January PMI manuf. flags stagnation
GDP growth, %Y oY
9
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04/02/2014 17:58
Export – minerals, import – nearly all the rest
External trade breakdown (% of total)
Whether oil-dependence is a gift or a curse for
the outlook – a source of long disputes…
Others
Machinery /transport
…but the WTO accession is no doubt a key for
structural changes needed to reduce economic
and fiscal vulnerability to oil price swings
Metals
Textile
Export
Import
Wood & paper
Chemicals
Minerals
Food
0%
20%
40%
Others
60%
80%
Trade balances in
US$bn
Machinery , transport
Metals
Textile, f ootwear
Wood & paper
US$247bn
Leather, f ur
Chemicals
Minerals
Food, agriculture
-100
-50
0
2001-2003 av g
50
100
2009-2011 av g
Source: Rosstat, ING
7 January 2009
10
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04/02/2014 17:58
Export: Growth rates vs “World” GDP
Weighted-average GDP of key Russia trade partners is seen at 2-2.3% in 2014-15 vs 1-1.5% in 2013,
1.1% in 2012 and 2.5% in 2011…
…while the Euro-component of global growth is key risk, given 50% of exports goes to Europe
25%
20%
2004- 2010
2011- 2013
Russia export grow th
15%
10%
5%
0%
-5%
4Q08-3Q09
-10%
-15%
-20%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Trade partners grow th
Source: Rosstat, Customs Service, ING
7 January 2009
11
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04/02/2014 17:58
Imports: Will remain a function of domestic
demand performance
After a visible decoupling from domestic demand in 2011, imports growth has “normalized”…
…and despite recent exports acceleration in 2013, imports will likely continue growing faster
40%
The gap conv erged and won’t likely reappear
30%
20%
15%
20%
10%
10%
5%
0%
0%
-10%
-5%
-20%
-30%
-10%
-40%
-15%
Ex ( real %YoY )
Im (rea l % YoY)
Domestic d emand proxy (rh s)
Source: Rosstat, Customs Service, ING
7 January 2009
12
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04/02/2014 17:58
Personal income & wages: supported by low
unemployment and social skew of the budget
30
Nominal wage growth: public vs private sectors
Contribution to nominal
wage growth (ppt)
25
20
Solid wages growth since late-2011 was spurred by
not only a healthy employment, but also a doubledigit rise in public and military & police salaries
Private sector ‘s adding to wage growth has been
moderating to 5-6ppt since 2H12 (vs 10ppt in 20111H12) due to corporates’ cost controls…
15
10
…while 2014 freeze of public wages and only
moderate hikes in 2015-16 will reduce their
contribution to the overall wages growth too
5
0
Private wa ges
Pub lic wages
Worsening demographic trend is a challenge for
growth/budget, but supportive for employment
Key income indicators vs unemployment rate
20%
5.0%
12%
6.5%
4%
8.0%
-4%
9.5%
Demographic trend vs unemployment
64%
11%
MinEco f orecast
62%
10%
9%
60%
8%
58%
7%
56%
% of working-age population
30
20
27
20
24
20
21
20
18
20
15
20
12
20
09
20
06
20
20
20
Real wage
Disp. income
Unemployment rate (rhs)
Unemployment, seas-adj (rhs)
03
4%
00
11.0%
6%
5%
52%
-12%
54%
Unemploy ment rate (rhs)
Source: Rosstat, MinFin, MinEco, ING
7 January 2009
13
15. Russia leads in the CIS, but still lags
behind the US by labor productivity
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Labor productivity vs the US level (GDP per employee, converted to US$ using PPP)
45%
40%
35%
30%
25%
20%
15%
10%
5%
199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1 201 2
Russia
Ukr aine
Kazakhsta n
Source: Ukrstat, CEIC Database, ING
7 January 2009
14
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04/02/2014 17:58
Lagging labor productivity vs real wages
is still the biggest challenge…
Cumulative growth of labor productivity vs real wages
Manufactu ring
Transport/Tel cos
Real estate
Russia avg.
Trade
Mining
Agr icul ture
Utili ties
Constru ction
Hotels/catering
Fish ery
Growth over 2010-12
-10% -5%
0%
Real wages
5%
10% 15% 20% 25%
Labor productivity
Source: Rosstat, ING
7 January 2009
15
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04/02/2014 17:58
…reflected in still rising Unit Labor Costs
Unit labor costs rose by nearly 50% since 2003 in Russia, more than doubled in Ukraine and
advanced by only 30% in Kazakhstan
Unit Labor Costs (ULC, index, 2003=1)
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
Ukr aine
Russia
Kazakhsta n
Source: Ukrstat, CEIC Database, ING
7 January 2009
16
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04/02/2014 17:58
Savings & borrowings: Room for balanced
lending growth and a bit higher savings
Lending growth and banks funding status
135 %
75%
130 %
60%
125 %
45%
120 %
30%
115 %
15%
110 %
0%
105 %
-15%
Loans-to-deposits ratio (rhs)
Retail loans, %YoY
Corp. loans, %YoY
Post-crisis rally in retail loans (38%YoY avg since
Jan-12) and low savings spurred consumption…
…but also pushed leverage indicators to record
highs despite 20+% cost of loans, requiring more
funds to service debts
2014-15 will likely see a turn back to a more
balanced growth, incl. due to moderating demand
from households, banks willingness to lend as
freely as before…
…as well as further CBR measures
Retail debt servicing
Consumer leverage indicators vs savings rate
28%
26%
24%
22%
20%
18%
16%
14%
12%
10%
39%
37%
35%
33%
31%
29%
27%
25%
23%
21%
30%
25%
20%
15%
10%
5%
0%
Retail loans to income
Savings+FX, % of income
Retail loans to wage (rhs)
Retail debt payments (principal+interest) as % of annual incomes
Source: Rosstat, ING
7 January 2009
17
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04/02/2014 17:58
GDP growth vs Gross National Savings
Avg. 2000-2008
Avg. 2009-2013
55%
50%
40%
35%
KOR
RUS
30%
JPN
CZE
IND
KAZ
25%
UKR
MEX
POL
20%
HUN
15%
BRA
TUR
ZAF
BGR
3%
6%
45%
40%
35%
9%
12%
GDP growth, %YoY
KAZ
RUS
25%
20%
IND
KOR
30%
CZE
HUN
JPN
BGR
15%
UKR
10%
0%
50%
Gross nat. savings, %/GDP
45%
Gross nat. savings, %/GDP
CHN
CHN
10%
-3%
MEX
POL
BRA
TUR
ZAF
0%
3%
6%
9%
12%
GDP growth, %YoY
Economic theory and recent history suggest that Gross National Savings remain key GDP driver…
…and post-crisis period proved again that lower savings seem to have contributed to slower growth
Source: IMF, Rosstat, Ukrstat, Customs Service, CEIC Database, ING
7 January 2009
18
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04/02/2014 17:58
Manufacturing sector operates nearly close
to pre-crisis capacity utilization
80
Avg. capacity utilization rate (% of total available)
80
75
75
70
70
65
65
60
60
55
55
50
50
45
45
Mining
Manufacturing
Utilities
Source: Rosstat
7 January 2009
19
21. [Enter reference here]
04/02/2014 17:58
Investments: Now more self-reliant, while still
sentiments-driven and conditional on oil…
Post-crisis reality forced companies to rely mostly on
own funds when funding capex programs…
Investments by funding sources (% of total)
100%
20%
22%
16%
22%
22%
22%
21%
20%
21%
21%
22%
6%
10%
6%
9%
7%
11%
25%
26%
20%
19%
6%
9%
5%
8%
23%
80%
20%
18%
60%
7%
8%
9%
5%
22%
7%
7%
11%
40%
20%
45%
45%
48%
42%
40%
39%
9%
37%
41%
42%
18%
5%
8%
45%
0%
2003
2004
Current/retained profit
2005
2006
2007
2008
2009
2010
2011
2012
Bank loans Non-bank loans Budget Others (incl. intercompany loans)
…with falling role of fiscal & bank funding and more
focus on intercompany loans…
Uncertain outlook and falling profits clearly depressed
investments…
…with strong profits link to RUB oil price flagging key
risk for investments outlook
Pre-tax profits dynamics looks weak and recent
improvements have been only marginal with only
mining and telecoms seeing profits growth in 11M13
Corporate profits dynamics (% YoY)
Corporate profits vs oil price in RUB
900 0
800 0
700 0
600 0
500 0
400 0
300 0
200 0
100 0
400 0
360 0
320 0
280 0
240 0
200 0
160 0
120 0
800
90%
60%
30%
0%
-30%
-60%
-90%
-120 %
Pre-tax profit, 12M rolling (RUBbn)
Urals, RUB/bbl (rhs)
Source: Rosstat, ING
7 January 2009
20
22. Investments: still hoarding cash –
preparing for the worst?
90%
Fixed investments dynamics and financial indicators
80%
30%
20%
70%
10%
60%
0%
50%
-10%
40%
30%
-20%
20%
-30%
Corp.deposits/12M investments
12M pre-tax profit/12M investments
Current accnts/12M investments
Investments, %YoY (rhs)
120 00
Corporate funds in banks (RUBbn)
100 00
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04/02/2014 17:58
BUT...
...corporate funds in banks have continued rising
not only as a share to annual investments...
...but in absolute terms as well…
...which could indicate several factors, including
future external debt repayments, M&A activity
etc. as well as extremely uncertain macro
outlook…
In any case, it is an issue how to force
companies to start spending all this cash pile
800 0
600 0
400 0
200 0
0
Corp. d eposits
Corp. curre nt accounts
Source: Rosstat, ING
7 January 2009
21
23. [Enter reference here]
04/02/2014 17:58
Investments: Lower public investment
takes its toll as well...
120 %
Investments by form of property
(nominal %YoY growth)
90%
In 2009-12 nominal private investments grew by
60% vs 20% in the public sector…
…and the breakdown by source of funds helps to
make the similar conclusion on budget money…
60%
In 9M13 gas sector, transport and utilities made the
lion’s share of overall decline in investments…
30%
…and deteriorating fiscal outlook makes the
overall investments performance even more
sensitive to private sector behavior...
0%
-30%
Federa l
Municipal
Region al
Private se ctor
Investments by source of funding (nominal %YoY 4Q growth)
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
The planned usage of the National Wealth Fund
money for infrastructure spending may improve
the short-term outlook
9M13 investments of big & medium corporates (ppt. contribution)
Others
Trade
Oil sector
Agr icul ture
Social
Real estate
Manuf. exl. oi l
Constru ction
Telecoms
Transport excl. p ipes
Utili ties
Natural gaz
Tota l
-6.5 ppt of total 6.9 ppt
-7
Bud get funds
-6
-5
-4
-3
-2
-1
0
1
Non-bu dget fund s
Source: Rosstat, ING
7 January 2009
22
24. [Enter reference here]
04/02/2014 17:58
Inflation – mostly a non-monetary
phenomenon…
Oil vs producer energy prices (%YoY)
INGF for Brent of US$105-110/bbl flag energy price
pressure on PPI inflation to be modest in 2014-15…
ING forecast at
100%
US$105-110/bbl
80%
60%
40%
20%
0%
-20%
-40%
-60%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Oil export net-back
Urals
New tariffs hikes schedule, good grains harvest, a
reversal of the base effect and no monetary
pressure will push CPI to CBR targets in 2014-15
Key risks are local/global food prices dynamics,
pass-through effects of weaker RUB and the
expected rise in alcohol/gasoline/tobacco excises
PPI mining sector (lhs)
PPI oil products
CPI inflation by key components
% MoM
3.0%
…which together with contained pricing activity in
manufacturing/services is good for CPI outlook
% Y oY
16%
2.5%
14%
2.0%
12%
1.5%
10%
1.0%
8%
0.5%
16%
Money supply and core inflation
60%
ING forecast
14%
50%
12%
40%
10%
30%
8%
20%
6%
6%
10%
0.0%
4%
4%
0%
-0.5%
2%
2%
-10%
0%
-20%
Food
Non-Food
Services
Inflation (rhs)
Series1
Core CPI
M2 gr owth, 15m l ead ( rhs)
Source: Rosstat, ING
7 January 2009
23
25. [Enter reference here]
04/02/2014 17:58
...and the recent tariff decisions reduce risks,
even though not fully
A freeze/slower hikes in utilities tariffs for corporates/households – key disinflationary factor…
...however the planned hikes of excises on alcohol (18-20% avg.), tobacco (30-50%) and gasoline (510%) in 2014-15 will continue keeping their toll on inflation given their 9% share in consumer basket, ie
nearly the same as utilities tariffs
10%
9%
A shif t in tarif f s hike f rom
January to July
17.5%
15.0%
8%
12.5%
7%
10.0%
6%
7.5%
5%
5.0%
4%
2.5%
3%
0.0%
2%
-2.5%
Food, e xcl. fruits/vegetable s and alcoho l
Non-food, excl. g aso line
Ser vices, excl. housing, uti litie s and transport
Core CPI
Source: Rosstat, ING
7 January 2009
24
26. [Enter reference here]
04/02/2014 17:58
Subdued inflation in core manufacturing
sectors – well done, but could it last forever?
Selected producer price indices (December 2009=1)
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0
Manuf. sector excl. gasoline
PPI utilities
PPI gasoline
Source: Rosstat, ING
7 January 2009
25
27. [Enter reference here]
04/02/2014 17:58
Local grain prices have started drifting lower,
recovering a discount to the global market
Dynamics of local and global wheat prices, CRB food index
550
500
450
400
350
300
250
200
120 00
100 00
800 0
600 0
400 0
200 0
Local wheat price (RUB/t)
Global wheat price (RUB/t)
CRB food price index (rhs)
Source: Bloomberg, Rosstat, ING
7 January 2009
26
28. [Enter reference here]
04/02/2014 17:58
CBR policy outlook – a balancing act for CPI,
growth, RUB and liquidity
Banking sector liquidity (RUBbn)
490 0
250 0
420 0
200 0
350 0
150 0
280 0
100 0
210 0
140 0
500
700
0
0
Corresp.accounts
Banks deposits
CBR notes holdings
CBR loans (rhs)
Factors affecting local liquidity
10
8
6
4
RUBtn
After two years of steady liquidity sterilization,
budget started taking money off the system slowly
due to fiscal deficit…
…while the CBR is still acting as a “lender of last
resort” keeping monetary inflation in check
Above-target CPI and high inflation expectations,
lower potential GDP growth (1.5-2%) and RUB
weakness will likely keep the CBR on hold till 2H14
New refinancing facilities (312-P loans, min. 3M rate
5.75%) will likely be used to target 3M MosPrime rate
down from current 7.20-7.25%
10%
Key policy rates vs money market O/N rate
10%
9%
8%
7%
7%
6%
6%
5%
5%
4%
4%
3%
3%
2%
2%
1%
1%
0%
2
0
-2
-4
-6
9%
8%
0%
O/N MM
Budget
RRR
FX-interventions
CBR refinancing
Refi rate
O/N RUB swap
CPI, % YoY
Core CPI, %YoY
Cash
Auctio n REPO
Fixed REPO
O/N depo
Source: Rosstat, ING
7 January 2009
27
29. [Enter reference here]
04/02/2014 17:58
RUB – the CBR has continued adding more
flexibility to the RUB
CBR FX policy – How it worked...
Corridor
Width
Range
CBR had kept details on its FX-policy mechanism a
secret, but in early October disclosed in full…
Volume of
including
interventions, US$mn un-planned
...in order to proceed on its way to inflation
targeting and full RUB flexibility since 2015
41.30
Upper bound
1 ruble
40.30 - 41.30
-400
250
CBR sells FX 1 ruble
39.30 - 40.30
-200
50
1 ruble
38.30 - 39.30
-70
0
37.30 - 38.30
0
0
36.30 - 37.30
70
0
CBR buys FX 1 ruble
35.30 - 36.30
200
50
1 ruble
34.30 - 35.30
400
250
Neutral - no
CBR
1 ruble
interventions
1 ruble
Lower bound
To succeed in this, the CBR cut the volume of
planned interventions finally to zero in Jan-14
reacting to worsened BoP balance...
…and reduced the threshold for a 5 kopecks
corridor shift to US$350mn while still keeping the
width of the floating corridor at 7 rubles
34.30
…and how it works now
Corridor
Width
Upper bound
CBR sells FX
Lower bound
Volume of
including
interventions, US$mn un-planned
MinFin
operations
41.30
0.95 ruble 40.35 - 41.30
1 ruble
Technical
0.1 ruble
corridor
Neutral - no
CBR
3 ruble
interventions
1 ruble
CBR buys FX
0.95 ruble
7 January 2009
Range
-400
-400
39.35 - 40.35
-200
-200
39.25 - 39.35
0
0
36.25 - 39.25
0
35.25 - 36.25
200
200
34.30 - 35.25
400
400
MinFin
purchase/sale of
+
FX for/from the
0
Reserve Fund
34.30
28
30. [Enter reference here]
04/02/2014 17:58
RUB vs Oil prices – on diverging paths
RUB remains correlated with oil price, but periods of weakening/broken correlations occur more often and
expensive oil is already not enough for the RUB to grow steadily
42.0
41.0
40.0
39.0
38.0
37.0
36.0
35.0
34.0
33.0
32.0
31.0
50
60
70
80
90
100
110
120
130
140
150
RUB/basket
7 January 2009
CBR coridor
Urals, US$/bbl (rhs)
29
31. RUB – capital flight is a pay for
higher RUB flexibility, but not fully
100
75
50
25
0
-25
-50
-75
Balance of Payments breakdown
US$bn
TB (goods+serv.)
F/A-govnmt
Errors/omissions
60
40
20
0
-20
-40
-60
-80
C/A others
F/A-banks
Capital flight, rhs
US$bn 80
50
20
-10
-40
-70
-100
-130
Cap/A
F/A-corporates
[Enter reference here]
04/02/2014 17:58
High oil prices have supported decent C/A surplus, but
it will likely continue evaporating with services
trade/income earnings acting further as a drag
4Q-rolling non-energy C/A deficit hit US$315bn in 4Q13
and will likely continue rising making the RUB fragile
High capital outflows is a partial reckoning for higher
RUB flexibility under decent C/A surplus…
…while “dubious”&”errors/omissions” piles of capital
flight is also high with others of a lower scale
Unchanged political/institutional environment, lower
privatization plan, MinFin FX-purchases – risks to RUB
BoP financial account components (US$bn, 4Q-rolling)
Total and non-energy C/A balance (US$bn)
150
0
100
-50
50
0
-300
-200
7 January 2009
-250
-150
Source: CBR, Rosstat, ING
-200
-100
PI
C.accts/dep o
Dubious de als
Errors/ommission s
-150
-50
FDI
FX-ccy
Loand /borro wing s
Others
-100
-350
Curren t accnt.
Capital flo ws
30
32. [Enter reference here]
04/02/2014 17:58
RUB: Low C/A surplus should naturally cap
future capital outflows
40
30
20
10
0
-10
-20
-30
-40
-50
-60
2007-1H09
Capital flows (US$bn)
2H09-4Q13
C/A balance (US$bn)
-10
-5
0
5
10
15
20
Source: CBR, Rosstat, ING
7 January 2009
31
33. [Enter reference here]
04/02/2014 17:58
RUB: REER has been retreating from all-time
highs of 2012-13…
Real RUB strengthening is mostly irrelevant for exports, but still important for imports supporting it
1.9
3.0
1.8
2.8
1.7
Stronger RUB
2.6
2.4
1.6
2.2
1.5
2.0
1.4
1.8
1.3
1.6
1.2
1.4
1.1
1.2
1.0
1.0
USD/RUB
EUR/RUB
REER
Imports, SA (rhs)
Source: CBR, Rosstat, ING
7 January 2009
32
34. [Enter reference here]
04/02/2014 17:58
…and more weakening is likely needed to
adjust for its overvaluation vs CEEMEA peers
50%:50% EUR: USD basket,
% chng since Jun-09
Assuming 3%/1.5% CPI differential over 2014-15 and a further correction back to zero REER change, we
arrive at 44-45/basket projections for the RUB by 2015-end…
…but key is whether markets will be able to drive this adjustments over a relatively short period of time?
20%
CAD
10%
ILS
PLN
NOK
0%
-10%
BRL
MXN
CZK
HUF
-20%
-30%
ZAR
-40%
-50%
-15% -10%
Strong ccy
RON
AUD
RUB
Should be somewhere here after
7% YTD drop
NZD
INR
TRY
-5%
0%
5%
10%
15%
20%
25%
REER, % chng since Jun-09
7 January 2009
33
35. [Enter reference here]
04/02/2014 17:58
RUB fair-value – Current Account-based
estimates flag overshooting at current levels
Our “fair-value” RUB estimates based on the C/A balance flag 35.5-36.0/USD by 2014-end…
…while still not as high as current 35+/USD over January-March, flagging an overhooting
37.0
1.15
35.0
1.22
33.0
1.29
31.0
1.36
29.0
1.43
27.0
1.50
USD/RUB - actual
EUR/USD
7 January 2009
USD/RUB - C/A-based
34
36. [Enter reference here]
04/02/2014 17:58
Has the RUB already prices in the USD rally
expected later in 2014?
95
37
90
35
85
33
80
31
75
29
70
27
US$ index (DXY)
7 January 2009
USD/RUB
35
38. [Enter reference here]
04/02/2014 17:58
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7 January 2009
37