Dollar Influx Into Russia Collapses To Mid-1990s Levels

95% of the Russian banking system is already under financial sanctions.

The Russian economy is experiencing a growing deficit of key world currencies due to the tightening of Western financial sanctions, which, according to the Central Bank of the Russian Federation, have already affected 95% of the national banking system, writes The Moscow Times.

According to estimates for 2024, Russia will have received only about $70 billion in foreign exchange earnings in dollars and euros, according to Alfa Bank analysts, citing Central Bank statistics.

According to the Central Bank, in January-November, Russian exporters exported goods worth $386 billion, and by the end of the year, according to the regulator's forecasts, export revenues will amount to about $420 billion.

However, as noted by Alfa Bank, only 18% of these deliveries are paid for in dollars and euros — the key currencies of world trade, which, according to SWIFT, account for 70% of trade turnover on the planet. According to the Central Bank, 43% of exports as of November were paid for in rubles, and 38.6% in “other currencies”, the main one for Russia being the Chinese yuan.

The inflow of major world currencies corresponds to the export income of the economy at the level of the 1990s, according to the Central Bank's statistics: $66.1 billion in 1994, $73.7 billion in 1998, $69.6 billion in 1999.

For comparison: before the start of the war, more than 80% of the foreign exchange revenue of Russian companies came from dollars and euros. And their inflow could have amounted to about $400 billion per year (as of 2021).

In reality, exporters received even less dollars and euros last year — about $50 billion, since a significant part of the revenue was “stuck” abroad due to the strengthening of American sanctions, Alfa Bank points out.

In November, Gazprombank, the last of the large state banks that retained access to dollar settlements and the SWIFT system, was hit by a new round of restrictions. Along with it, about 50 more banks that serviced foreign trade were also blacklisted.

According to MoneyRoo, Russian companies lost every third dollar that they were supposed to receive for goods exported from the country. According to Alfa Bank, this is a sum of approximately $20 billion, or more than 2 trillion rubles at the current Central Bank exchange rate.

“This is a significant amount that has a negative impact on the financial condition of companies and their ability to continue their activities, including import purchases,” Andrey Gusev, managing partner of the Nordic Star law firm, told RBC.

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