Bank of Lithuania

Key March results. In March 2003, the balance of payments current account was negative amounting to LTL 424.7 million.In January and February the current account balances were positive (LTL 232.7 million and LTL 69.1 million, respectively).The expansion of the CAD in March was mostly determined by the considerable widening of the foreign trade deficit.According to preliminary data (based on the balance of payments data for the period from January to March), the CAD in the first quarter made up LTL 123 million (LTL 512.6 million in Q1 2002).

According to the data of the Department of Statistics, in March 2003, compared to February 2003, export of goods decreased by 5.1 per cent, while import went up by 19.8 per cent.In March 2003, compared to the same period last year, export of goods increased by 4.2 per cent, while import grew by 15.4 per cent.Meanwhile in January and February, compared to the same months of 2002, exports growth significantly outpaced import growth.

Similar developments were also observed in the services sector in March.Compared to February, export of services increased in March by 10.4 per cent, while import of services increased by 28.6 per cent.The positive balance of services amounted to LTL 108.3 billion (LTL 134.8 million in February).Compared to March 2002, export of services contracted by 6.4 per cent, while import of services went up by 12.2 per cent.The positive services balance contracted over the period under comparison by LTL 58.2 million.One of the reasons for the decline of the export of services in March was a much smaller number of foreign visitors coming to the country and the resulting decline in the positive travel balance.

In March 2003, payments to non-residents on their direct investment in Lithuania increased significantly.For this reason the negative income balance in March (LTL -101.1 million) was nearly LTL 10 million higher than the negative income balance in January and February.

Financial inflows from the EU PHARE and ISPA funds increased in March, and the positive balance of current transfers went up by LTL 18.9 million compared to February.

The capital and financial account balance was positive in March and made up LTL 176.1 million.Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, grew in March by LTL 83.6 million, while international financial liabilities went up by LTL 1,202.6 million.The balance of non-repayable capital transfers amounted to LTL 5.9 million in March.

Foreign assets of domestic commercial banks increased by LTL 110.9 million in March.The largest increase was recorded in commercial bank deposits in foreign banks.Foreign assets of other sectors decreased by LTL 27.3 million.

Foreign direct investment flows were stood at LTL 85.2 million in March.

In March, an issue of Government long-term debt securities was successfully distributed, hence portfolio investment inflows made up LTL 1.4 billion.Other non-resident investment declined by LTL 276.3 million (mostly due to the contraction of repurchase agreements with non-residents and the decline of non-resident deposits in domestic banks).

The positive international reserve flows in the balance of payments were LTL 948.9 million in March 2003.The main reason behind the increase was the inflows from EUR 400 million ten-year Eurobond placement into central government accounts at the Bank of Lithuania.A factor reducing international reserves was the net sale of foreign exchange to commercial banks of LTL 134 million and the decline of repurchase transactions with non-residents of LTL 226.3 million.