Macro and Politics

* We expect the December Current Account Balance to post a deficit of USD3.5bn, below the median estimate of USD4.1bn according to the survey conducted by Foreks. Accordingly, we anticipate an annual current account deficit of around USD9bn (0.7% of GDP) for 2024. For 2025, our year-end current account deficit forecast stands at USD15bn (1% of GDP), with upside risks attached.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of January 31 – February 7 today @ 14:30 local time. Based on our calculations from the CBT’s analytical balance sheet, we estimate that during the week of January 31 – February 7, the net international reserves increased by USD650mn to USD72.32bn and the gross FX reserves climbed by USD1.5bn to USD167.6bn. To recall the data from the previous week: During the week of January 24 – 31, the equity market experienced a modest foreign inflow of USD89.1mn, while foreign investors emerged as net sellers in the bond market (excluding repo transactions) with a net outflow of USD682.8mn, reversing the trend of four consecutive weeks of inflows. Accordingly, the foreigners’ share in the total bond stock retreated merely from 8.7% to 8.6%. On an annual basis, the equity market recorded a cumulative foreign outflow of USD2.7bn, whereas the bond market (excluding repo transactions) saw a cumulative foreign inflow of USD17.5bn. Besides, the residents’ FX deposits decreased by USD1.2bn (gold accounts excluded, EUR/USD parity adjusted) in the period of January 24 – 31, while the residents’ total FX deposits (including gold, price adjusted) slid by USD1.2bn. The CBT’s gross FX reserves dropped by USD1.6bn to USD166.1bn, while net international reserves decreased by USD2bn to USD71.7bn. Net reserves excluding swaps, moreover, rose by USD2.3bn to USD65.2bn.