Russia’s Trade Surplus Shrinks on Falling Oil Prices

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Russia’s Trade Surplus Shrinks on Falling Oil PricesRussia saw its trade surplus in September shrink to a seven-month low as declining oil prices weighed on export revenue as violence in Ukraine intensifies.

The excess plunged 20 percent from the previous year to $13 billion, reported the central bank. Economists surveyed by Bloomberg News had expected a surplus of $15.7 billion. Imports fell 10 percent to $25.8 billion while exports declined 13 percent to steady at $38.8 billion.

The Bank of Russia on Monday expressed concern that the falling crude prices and sanctions were affecting the nation’s economy. Russia and the West are currently engaged in a standoff over what the U.S. and the European Union term as Russia’s interference in the Ukraine conflict, a claim Kremlin vehemently denies.

“A stronger-than-expected decline is negative for the ruble as the trade surplus is the main underlying factor of support for it,” Vladimir Osakovskiy, a Moscow-based chief economist for Russia at Bank of America Corp., told Bloomberg News. “However, we think that the dated nature of the release should constrain its negative market implications.”

The Federal Customs Service announced on Monday that Russia’s trade excess expanded $8.6 billion in the first three quarters from the previous year to $164.7 billion. Imports in the January-September period plunged 5.8 percent to $217 billion while exports fell 1.2 percent to $381.3 billion.

Meanwhile, small business sentiment in the U.S. rose in October as more companies indicated that they intend to scale up investments and were finding it difficult to find workers for the various jobs.

The National Federation of Independent Business reported that its Small Business Optimism Index rose 0.8 point to 96.1.

26 percent of small business owners revealed they intend to shore up investments, the second highest proportion since 2008. 24 percent of those surveyed said they found it hard to recruit workers for various job openings, an increase of 3 percentage points from a month earlier. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com