Russia’s international currency reserves have fallen by $56.7bn to reach $572.7bn (including the CBR’s frozen reserves in Europe) as of July 8 (chart), the Central Bank of Russia reported on July 15.

The fall comes as Russia is seeing the biggest inflows of capital ever thanks to high oil prices and a concurrent collapse in imports.

Russia's current account surplus hit a record of $70.1bn in the second quarter of the year, as surging revenues from energy and commodity exports helped offset the impact of US and European sanctions imposed over President Vladimir Putin's invasion of Ukraine.

“Russia’s current account surplus widened significantly to $70.1bn in the second quarter of 2022 from $17.3bn in the corresponding period of the previous year, a preliminary estimate showed,” Trading Economics said in a note. “It was the largest current account surplus since available records began in 1994, supported by Russia’s heavyweight commodity exports while sweeping sanctions lowered the amount of purchases the Russian economy took in. The goods and services aggregate surplus surged to $80.7bn from $34.8bn a year ago. At the same time, the primary and secondary income gap narrowed to $10.6bn from $17.5bn.”

However, this extra money has not shown up in the central bank’s reserves yet, although the rebalance of reserves, where money accumulated by the Ministry of Finance in the form of oil export receipts, only happens periodically.

The fall is also surprising, as thanks to the sanctions regime, the Kremlin has little to spend its money on at the moment. “The only thing that Russia is importing at the moment is money,” is a quip circulating on social media at the moment.