Can Russia reorient its trade and financial flows?
Simola, Heli (05.12.2022)
Numero
7/2022Julkaisija
Bank of Finland
2022
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2022120569390Tiivistelmä
Russia’s invasion of Ukraine and resulting sanctions have substantially hurt Russia’s economic relations with developed economies. Countries imposing sanctions on Russia accounted for half of Russia’s foreign trade and over half of foreign financial flows before the war. We analyse the development of Russia’s trade and financial relations in recent months and find that Russia’s success in reorienting its trade and investment flows has been mixed.
Sisällysluettelo
Abstract ... 3
1. Introduction ... 4
2. Russian economic relations before the war ... 4
3. Foreign financial flows to Russia dry up ... 6
3.1 Russia sees historically large investment outflows ... 6
3.2 Foreign companies leave Russia ...m7
3.3 Private sector currency debt plummets ... 7
3.4 The rise of the Chinese yuan on Russia’s currency markets ... 8
3.5 International payments still difficult ... 9
4. Russia’s success in reorienting trade flows has been mixed ... 10
4.1 Russia has found alternative buyers for key exports, but it is getting harder ... 10
4.1.1 Oil exports shift to Asia ... 11
4.1.2 The challenges of diversifying petroleum product exports ... 12
4.1.3 Natural gas exports impossible to reorient over the short term ... 12
4.2 Despite modest reorientation, Russian imports have declined sharply ... 13
4.2.1 Imports from China have recovered to pre-war levels ... 14
4.2.2 Sharp growth in imports from Turkey ... 15
4.2.3 Kazakhstan provides an alternative route for machinery and equipment imports ... 16
4.2.4 Other countries ... 17
5. How important an economic partner is Russia for other countries? ... 18
6. Concluding remarks ... 20
References ... 21
1. Introduction ... 4
2. Russian economic relations before the war ... 4
3. Foreign financial flows to Russia dry up ... 6
3.1 Russia sees historically large investment outflows ... 6
3.2 Foreign companies leave Russia ...m7
3.3 Private sector currency debt plummets ... 7
3.4 The rise of the Chinese yuan on Russia’s currency markets ... 8
3.5 International payments still difficult ... 9
4. Russia’s success in reorienting trade flows has been mixed ... 10
4.1 Russia has found alternative buyers for key exports, but it is getting harder ... 10
4.1.1 Oil exports shift to Asia ... 11
4.1.2 The challenges of diversifying petroleum product exports ... 12
4.1.3 Natural gas exports impossible to reorient over the short term ... 12
4.2 Despite modest reorientation, Russian imports have declined sharply ... 13
4.2.1 Imports from China have recovered to pre-war levels ... 14
4.2.2 Sharp growth in imports from Turkey ... 15
4.2.3 Kazakhstan provides an alternative route for machinery and equipment imports ... 16
4.2.4 Other countries ... 17
5. How important an economic partner is Russia for other countries? ... 18
6. Concluding remarks ... 20
References ... 21