Bank of Lithuania

Key August results.In August 2002, the balance of payments current account deficit (CAD) made up LTL 97.5 million.Compared to July, it contracted by LTL 84.1 million.In July and August 2002, the CAD made up LTL 279.2 million, i.e. as little as one fourth of second quarter CAD.This allows to expect that, compared to the second quarter of 2002, the CAD during the third quarter will be significantly lower.

The narrowing of the CAD in August was mostly determined by the contraction of foreign trade deficit.Thus, in August 2002, compared to July, export of goods contracted, yet the contraction of imports was larger.Compared to the same period last year, export growth was slower than import growth.Thus, in August 2002, compared to August 2001, export of goods increased by 4.4 per cent, while import of goods (at f.o.b. prices) grew by 9 per cent.

Compared to July 2002, export of services also went down by 6 per cent.Import of services contracted by 4.8 per.Compared to August 2001, export and import of services increased by 4.3 per cent and 6.5 per cent, respectively.Compared to July 2002, the positive balance of services went down by LTL 17.9 million and increased by LTL 3.8 million compared to August 2001.

In August 2002, compared to July, the negative income balance declined by LTL 6.5 million, but the positive balance of transfers went down as well (LTL 11 million).

The capital and financial account balance was positive in August, making up LTL 450.1 million.Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, contracted in August by LTL 603.4 million, while international financial liabilities went down by LTL 59.3 million.

Foreign assets of domestic commercial banks went down by LTL 402.8 million, and foreign assets of other domestic economic entities decreased by LTL 200.6 million.The decline of commercial bank foreign assets was determined an LTL 397.6 million decline of overnight deposits (which had gone up by LTL 490.3 million in July).The negative foreign investment flows by other domestic economic entities were determined by an LTL 183 million contraction of deposits and balances on correspondent accounts with foreign banks.

Foreign direct investment flow in August made up LTL 114.1 million, while portfolio investment stood at LTL 1.2 million.On the other hand, repayment of foreign loans received in the name of the state (LTL 101 million) and decline of non-resident deposits and balances on correspondent accounts with domestic commercial banks determined negative overall foreign investment flows in Lithuania in August.

In August, net purchase of the anchor currency by the Bank of Lithuania from commercial banks amounted to LTL 173.5 million.As a consequence, regardless of the decline of foreign currency deposits of the central government, the total positive international reserve flows in the balance of payments were LTL 105.1 million in August.