International Finance Course

Assignment 2

Russian Balance of Payment:

Strength, Weakness and Recommendations

By: Ehab Mohamed Helmy

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Dataset: Balance of Payments

Subject
Measure

BOP, balance in millions

US-Dollar converted, Seasonally adjusted
Annual

Frequency
2006

2007

84,389
104,560
268,869
-164,310
116,185
240,024
-123,839
-11,625
28,845
-40,471
-18,526
17,481
-36,007
-12,387

92,316
123,740
333,200
-209,460
134,294
297,481
-163,187
-10,555
35,719
-46,273
-28,803
29,770
-58,574
291

72,193
106,729
390,391
-283,661
123,447
346,530
-223,084
-16,718
43,860
-60,578
-28,829
45,584
-74,412
-10,641

103,935
157,206
523,434
-366,228
177,625
466,298
-288,673
-20,420
57,136
-77,555
-46,482
61,820
-108,302
-104

50,384
95,630
342,951
-247,321
113,231
297,155
-183,924
-17,600
45,797
-63,397
-39,739
33,399
-73,139
-12,466

67,452
120,875
441,833
-320,958
146,995
392,674
-245,680
-26,120
49,159
-75,279
-47,105
38,064
-85,168
-41

97,274
163,398
573,448
-410,050
196,854
515,409
-318,555
-33,456
58,039
-91,495
-60,399
42,687
-103,086
130

72,016
145,810
590,345
-444,536
192,296
528,005
-335,709
-46,487
62,340
-108,827
-67,661
47,758
-115,419
-5,218

Gross acquisitions /
disposals of nonproduced
nonfinancial assets
Capital transfers
Received
Paid

-57
-12,331
95
-12,426

-35
325
345
-19

-57
-10,583
144
-10,727

-309
205
208
-3

-244
-12,222
391
-12,613

24
-65
143
-208

38
92
166
-75

-402
-4,816
361
-5,177

Balance from current

and capital accounts
Financial account
Direct investment

72,001
-66,997
-2,372

92,606
-103,854
7,602

61,552
-51,820
11,072

103,832
-100,780
19,120

37,917
-31,524
-6,697

67,411
-58,275
-9,448

97,404
-88,748
-11,767

66,798
-56,528
1,765

Net acquisition of
financial assets

-17,880

-29,993

-44,801

-55,663

-43,281

-52,616

-66,851

-48,822

Net incurrence of
liabilities
Portfolio investment

15,508
-11,443

37,595
16,486

55,874
4,857

74,783
-35,691

36,583
-1,882

43,168
-1,495

55,084
-15,277

50,588
17,031

Net acquisition of
financial assets

-10,666

6,276

-10,536

-7,774

-10,599

-3,444

-9,837

-2,281

-776
-233

10,210
-99

15,393
332

-27,916
-1,370

8,716
-3,244

1,948
-1,841

-5,440
-1,394

19,312
-1,356

Net acquisition of
financial assets

858

1,242

2,762

9,117

9,890

8,840

16,438

16,696

Net incurrence of
liabilities
Other investment

-1,091
8,511

-1,342
-20,376

-2,430
80,847

-10,487
-121,765

-13,134
-16,323

-10,682
-8,739

-17,832
-47,679

-18,052
-43,952

Net acquisition of
financial assets
Other equity

-34,005
-31

-50,995
-225

-59,930
-66

-185,863
-666

9,245
-38

-19,232
-311

-83,365
-1,255

-84,539
-226

Time

Current account
Goods and services
Exports
Imports
Goods
Exports
Imports
Services
Exports
Imports
Primary income
Receivable
Payable
Capital account

Net incurrence of
liabilities
Financial derivatives

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2005

2008

2009

2010

2011

2012

Foreign currency

-1,339

9,595

15,831

-29,397

6,652

14,989

3,433

-2,207

Current accounts
and deposits
Loans

-12,724
13,306

-16,514
-21,404

-13,803
-25,110

-54,988
-40,015

8,161
15,649

2,884
-9,168

-21,223
-23,912

-15,686
-14,019

-6

-8

-10

-312

-183

-373

-297

-339

-7,645

-616

-804

-8,129

5,947

-769

-3,455

-8,474

1,893

75

-282

18

-1,829

-887

-1,652

-1,928

-27,535

-21,302

-34,497

-50,635

-24,559

-25,904

-33,263

-38,816

73

-596

-1,189

-1,739

-554

307

-1,741

-2,844

Net incurrence of
liabilities
Other equity
Domestic currency

42,516
0
129

30,619
0
322

140,777
0
934

64,099
0
1,528

-25,568
0
727

10,493
0
22

35,686
0
-262

40,587
15
928

Current accounts
and deposits
Loans

17,300
24,733

47,069
-17,477

51,714
86,864

11,808
49,120

-37,739
2,854

19,509
-9,912

20,493
14,293

28,738
8,787

-88

27

64

262

138

626

53

262

514

353

701

1,261

1,731

-950

755

641

1,469

0
-61,461
-5,004

0
-107,466
11,248

0
-148,928
-9,733

0
38,925
-3,051

8,887
-3,377
-6,394

2
-36,751
-9,136

-3
-12,630
-8,655

-2
-30,017
-10,270

591,000

764,000

989,900

1,660,900

1,222,700

1,524,900

1,899,100

Insurance, pension,
and standardized
guarantee schemes
Trade credit and
advances
Indebtedness on
supplies according to
intergovernmental
agreements
Fictitious
transactions**
Other accounts
receivable

Insurance, pension,
and standardized
guarantee schemes
Trade credit and
advances
Other accounts
payable
Special drawing
rights
Reserve assets
Net errors and omissions
GDP

1,299,700

After Reviewing the Russian Balance of Payment (BOP) over the past 8 years, we can give some figures
with recommendations.

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GDP
From the numbers shown below we can estimate that Russia has a growing economy which encourage
investors to trade in.

GDP
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000

GDP

800,000
600,000
400,000
200,000
2005

2006

2007

2008

2009

2010

2011

2012

Current Account Balance

Below well be showing the first pillar of the BOP which is the Current account and its subsidiaries (Goods,
Service and Income)

Current Account
120,000
100,000
80,000
60,000

Current Account

40,000
20,000
0
2005

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2006

2007

2008

2009

2010

2011

2012

Goods, Services and Income

250,000
200,000
150,000
Goods

100,000

Services
50,000

Income

0
2005

2006

2007

2008

2009

2010

2011

2012

-50,000
-100,000

From the Above figures we can see that the strong point of the Russian economy is exporting goods, while they
have a deficit in the balance of services.
So I recommend starting exporting services to Russia as they importing value increases by time.

Capital Account

Capital Account
2,000
0
-2,000

2005

2006

2007

2008

2009

2010

2011

2012

-4,000
-6,000
-8,000
-10,000
-12,000
-14,000

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Series1

Financial Account
From the figures below we can easily see that the financial Russian balance is not reliable and not recommend
investing our money in it.

Financial Account
0
2005

2006

2007

2008

2009

2010

2011

2012

-20,000
-40,000
-60,000

Series1

-80,000
-100,000
-120,000

FDI & Portfolio Investment

30,000

20,000

10,000

0
2005
-10,000

-20,000

-30,000

-40,000

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2006

2007

2008

2009

2010

2011

2012

FDI
Investment Portfolio