In February 2004, the Balance of Payments current account balance was negative amounting to LTL 294.7 million. Compared to January 2004, the current account deficit (CAD) widened by LTL 192.4 million, and compared to February 2003, by LTL 325.3 million. The CAD widening resulted from the expansion of the export of goods.
According to the data of the Department of Statistics, in February 2004, compared to January, export of goods increased by 7.3 per cent, while import of goods grew by 12.9 per cent. Compared to the same period last year, export of goods increased by 8.3 per cent, while import grew by 17 per cent.
Compared to January, export of services increased in February by 2 per cent, while import of services increased by 23 per cent. The positive balance of services decreased by LTL 40.6 million and amounted to LTL 131.9 million. Compared to February 2003, export of services decreased by 2.8 per cent, while import of services increased by 6.9 per cent. The positive balance of services contracted over the period under comparison by LTL 28.1 million. The export of transport services continued to grow in February, but the export of travel services declined.
Compared to January, the positive balance of compensation increased by LTL 15.2 million, while payments to non-residents (on investment in Lithuania) went up by LTL 29.6 million (mostly due to interest payments on Government securities). Due to the widening of the negative investment income balance, the overall income balance was negative and amounted to LTL 71 million in February. Compared to January, it widened by LTL 16.7 million, and compared to February 2003, by LTL 66.4 million.
The balance of current transfers was positive in February 2004 at LTL 48.5 million, up by LTL 9.4 million compared to January. In comparison with February 2003, this balance increased by LTL 18 million.
The positive capital and financial account balance made up LTL 171.6 million in February 2004. Foreign assets of domestic economic entities (financial claims to non-residents), excluding reserve assets, grew in February by LTL 522.6 million, while international financial liabilities went up by LTL 390.1 million.
Foreign assets of domestic commercial banks increased by LTL 338 million in January 2004. The largest increase was recorded in commercial bank correspondent account time deposit balances with foreign banks. Foreign assets of other sectors went up by LTL 184.7 million.
Foreign direct investment flows in Lithuania were positive amounting to LTL 111 million in February 2004, which was determined by non-resident investment in equity capital and reinvestment.
On the other hand, non-resident portfolio investment flows were negative (LTL -16.8 million) in February. Holdings of Lithuanian debt securities by non-residents declined by LTL 71 million in February 2004. Other investment flows amounted to LTL 317.9 million. The growth of this investment was determined by investment in the banking sector as a result of an increase in non-resident deposits and balances on correspondent accounts.
The reserve asset flows in the balance of payments were negative in February 2004 (down by LTL 304.1 million). The main reason behind the decrease was the operations of the Bank of Lithuania with central government institutions, which pushed the reserves down by LTL 174 million. A factor reducing international reserves was the net sale of foreign exchange to commercial banks of LTL 155.4 million and the decline of repurchase transactions with non-residents of LTL 32.2 million. Reserves were pushed up in February by an LTL 13 million increase in commercial bank required reserves in foreign exchange and net inflows of the Bank of Lithuania from investment in foreign currencies.