Global growth in the second quarter of 2018 was solid, albeit divergent. Global trade stagnated in Q2, reflecting weakening trade flows in and out of Asia and decelerating imports from some major advanced economies. Financial conditions for emerging economies tightened amid concerns about reduced dollar-denominated funding, escalating trade tensions, softening growth prospects, and rising policy uncertainties. After declining to a 4-month low in mid-August, oil prices have risen steadily, with the price of Brent crude oil briefly reaching US$80 per barrel (bbl) in mid-September. Turbulence in emerging markets, combined with new sanctions, increased uncertainty, and elevated geopolitical tensions, resulted in capital outflows from Russia’s financial market and a substantial depreciation of the ruble in August. To curb volatility on the financial market, on September 14th, the Central Bank of Russia (CBR) suspended currency purchases in the fiscal rule framework in the open market until the end of the year. This decision provided the ruble with additional support from relatively high oil prices. Heightened uncertainty about sanctions, elevated inflation expectations and pressures, and a planned increase in the value-added tax rate in 2019 also prompted the CBR to raise the key policy rate by 25 basis points to 7.5 percent. Growth momentum weakened in August. Key credit risk and performance indicators have been relatively stable and lending growth has picked up further. Higher oil prices, improved tax administration, a weaker ruble, and a conservative fiscal policy strengthened federal budget balance in the first seven months of 2018.