Russian foreign trade fell to three-year low after threat of US secondary sanctions

Threats by the US to cut off from the dollar system banks that help the Kremlin to circumvent sanctions collapsed the foreign trade of the terrorist country of russia in early 2024.

In January, exports of goods from the russian federation amounted to USD 28.9 billion, the Central Bank of russia reported.

This is 14.1% less than a year earlier and the lowest value since January 2021. Imports also decreased: by 12.6% compared to January 2023, to USD 21 billion. The last time it was less was in May 2022. And if not to take the first months of the war (then imports collapsed by 30%), then also in January 2021. Foreign trade turnover in January was also the lowest since the beginning of 2021 - USD 49.9 billion.

The export revenue comes about two months late, the Central Bank noted. The January failure primarily reflects the fall in oil prices at the end of the year: according to the Ministry of Finance of the russian federation, the average price of Urals in November 2023 was USD 72.84, and in December USD 64.23. There were also signs of settlement difficulties, which intensified after US President Joseph Biden issued an executive order in late December authorizing secondary sanctions against banks that help circumvent the restrictions.

It hit imports especially hard: it became much more difficult to pay for the goods. Chains of payments even in "friendly" currencies have lengthened, some jurisdictions, such as Hong Kong, have to pay through third countries.

The Central Bank of the russian federation considers the reduction in imports to be the result of its policy aimed at limiting consumer demand. High interest rates and a low exchange rate of the ruble limit imports, the regulator has repeatedly emphasized. However, it acknowledges the impact of sanctions.

A certain role in the reduction of exports was played by "additional complications in conducting foreign trade operations in terms of calculations and logistics," said Elvira Nabiullina, head of the Central Bank of the russian federation. This problem was considered by the board of directors of the Central Bank, discussing the key rate in mid-February.

"Participants (of the meeting) paid attention to the consequences of additional difficulties in external calculations. It was noted that if the difficulties affect both exports and imports at the same time, then a pronounced impact on the exchange rate may not be observed."

This year, the Central Bank of the russian federation predicts a reduction in both imports and exports, primarily oil and gas, which will last three years, the regulator expects. Experts are also making forecasts worse. In the published results of a survey of more than 30 macroeconomists, the forecast for exports worsened by USD 10 billion, and imports - by USD 1 billion (we are talking about total exports, including services, but trade in goods is many times larger).

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