There are worse problems for a poor country than a huge current-account surplus. But for Russia, which usually has too little money not too much, this new problem is not much better than its old ones. Thanks to high oil and gas prices, the value of Russian exports is soaring. In the first quarter of this year, they were worth $23 billion, up from $16 billion a year ago. Oil and gas accounted for almost all that increase. Since the devaluation of the rouble in August 1998, imports have slumped. Russian exporters have to exchange their foreign-currency earnings for roubles. Despite many loopholes, this means a huge pool of money sloshing around Russia's crippled financial system. In the absence of a decent government-bond market, the authorities have few ways of soaking up—"sterilising"—these inflows. The monetary base has risen from 250 billion roubles ($10 billion) in June 1999 to 390 billion roubles last month. As a result, inflation is picking up. The monthly rise in June was 2.5%, bringing predictions of a year-end figure of 35%, compared with the planned 18%.
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