sanctions and complication of settlements with foreign counterparties led to capital outflow in 2022
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The imposition of sanctions and the complication of settlements with foreign counterparties had a significant impact on capital flows last year, according to CMASF calculations. The amount of funds withdrawn through the channel of trade loans and advances amounted to $66 billion, compared to 2021, such an outflow increased by $54 billion – this was primarily due to a change in the model of foreign trade financing: a large share of imports began to be advanced, and export lending largely shifted from foreign banks to domestic organizations, the center states. The total outflow of funds through the financial and capital transactions channel of the balance of payments amounted to $243 billion – the outflow became possible against the backdrop of a record high current account surplus ($227 billion against $122.3 billion in 2021, growth was accompanied by a record increase in the value of exports and a decrease in imports ).
In addition, withdrawals of foreign direct investment made a significant contribution. This is partly due to the “moving” of funds to other jurisdictions, including as part of transactions to acquire former Russian assets owned by foreign companies, the CMASF notes. The volume of outflow through this channel, according to experts of the center, amounted to about $40 billion. Another approximately $47 billion was the total outflow of capital as a result of transactions performed by individuals (including due to an increase in deposits in foreign banks by $33 billion and an increase in cash balances in population by $14 billion). About $62 billion was allocated to repay loans and borrowings.
The CMASF notes that the outflow through these channels was mainly a result of the economy adapting to new conditions and is temporary in nature – a slowdown in the outflow began to be observed already in the fourth quarter of last year, and the total outflow for January-June amounted to $ 27 billion (on average, the outflow is 5–7% of GDP annually, see graph). At the beginning of the year, foreign analysts pointed to the formation of a large currency “cushion” among Russian exporters – in particular, the Institute of International Finance (IIF) noted that the “freezing” of funds in banks of trading partner countries last year became a common practice, but the statistics on bank balance sheets did not allow assessing where the claims on foreign countries accumulated due to the growth of the current account surplus are located.
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