OREANDA-NEWS. May 13, 2010. CBR published 1Q10 trade balance data, with exports at USD92.6b, and imports at USD 45.6b, thus bringing the trade surplus to a very strong USD 47b, reported the press-centre of OTKRITIE Financial Corporation.

View: The trade data is broadly in line with the 1Q10 Balance of Payments data published in early April. Exports were 1.4% above the initial assessment, and imports were 0.6% higher respectively. The trade surplus is thus up 150% YoY.

However, the March data confirms the sharp acceleration of imports (29% growth YoY), compared to 15% YoY growth in February. This is a negative in our view, as consumption recovery seems to fuel imports while local producers' competitiveness is hampered.

The main reason for this is the sharply appreciating ruble (real ruble appreciation was +9% in just 4M10 implying that the positive effect of the 2009 devaluation is already off-set), high interest rate environment, and wage pressure. Should the acceleration of imports persist, this means that Russian trade balance would not have the potential to expand further under stable oil prices, and could instead start shrinking going forward.