Bank of Lithuania

Key November results.In November 2002, the balance of payments current account deficit (CAD) made up LTL 261.7 million.Compared to October, in went down by LTL 9.9 million, and, compared to November 2001, it contracted by LTL 167.8 million.The narrowing of the CAD in November was mostly determined by the contraction of foreign trade deficit.

According to the data of the Department of Statistics, in November 2002, compared to October, export of goods decreased by 8.1 per cent, while import went down by 9.7 per cent.The foreign trade deficit contracted by LTL 116.5 million.In November 2002, compared to the same period last year, export of goods increased by 17.8 per cent, while import grew by 10.5 per cent.

Similar developments were also observed in the services sector.Compared to October 2002, export of services decreased in November by 4.5 per cent, while import of services contracted by 14 per cent.The positive services balance increased by LTL 17.4 million.Compared to November 2001, export of services increased in November 2002 by 21.9 per cent, while import of services declined by 7.8 per cent.The positive services balance increased by LTL 99.5 million over the review period, i.e. nearly twice.

Interest payments to non-residents on loans received on behalf of the state and Eurobonds issued by the Government were higher in November 2002 as compared to October, which determined an increase of the negative income balance.In addition, the positive balance of current transfers decreased by LTL 9 million compared to October.The above developments (in contrast to the development of trade deficit) were pushing up the CAD.

The positive capital and financial account balance made up LTL 381.1 million.Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, went down by LTL 62.4 million in November, while international financial liabilities increased by LTL 161.5 million.In addition, non-repayable capital transfers amounted to as little as LTL 5.9 million (LTL 11.4 million less than in October).

Foreign assets of domestic commercial banks increased by LTL 35 million in November.The investment of commercial banks in non-resident securities went down by LTL 61 million, while other investment abroad (mostly time deposits with foreign banks) increased by LTL 97.4 million.The decline of trade credit of non-residents determined the same (LTL 97.4 million) decline of foreign assets of other domestic economic entities.

Foreign direct investment flows made up LTL 185.3 million in November, consisting for the most part of the inflows from the new issue of Agricultural Bank shares received from non-residents.

In November, other non-resident investment in domestic commercial banks made up LTL 6.1 million, and in other sectors it amounted to LTL 50 million (mostly consisting of increased trade credit to non-residents).Total foreign loan flows received on behalf of the state were negative during the month of the review (more foreign loans were repaid) and stood at LTL 80 million.

The total negative international reserve flows in the balance of payments were LTL 151.3 million in November 2002.The main reason behind the decrease of international reserves was the operations of the Bank of Lithuania with central government institutions, which pushed the reserves down by LTL 132.2 million.Another source of the decrease was the net sale of foreign exchange to commercial banks of LTL 69.7 million.Reserves were pushed up by a LTL 34.1 million increase in commercial bank required reserves in foreign exchange and net inflows of the Bank of Lithuania from investment in foreign currencies.

Note.During the compilation of the quarterly balance of payments on the basis of more comprehensive quarterly data, monthly data will be revised.