Bank of Lithuania

In October 2003, the Balance of Payments current account balance was negative amounting to LTL 228.8 million (the current account deficit in September amounted to LTL 363.1 million).Compared to October 2002, the current account deficit went down by LTL 169.2 million.It was determined by a lower foreign trade deficit.

According to the data of the Department of Statistics, in October 2003, compared to September 2003, export of goods increased by 15.1 per cent, while import of goods grew by 11.3 per cent.Compared to the same period last year, in October 2003 export of goods increased by 11.4 per cent, while import grew by 1.4 per cent.

Compared to September 2003, export of services decreased in October by 2.1 per cent, while import of services contracted by 17.7 per cent.The positive balance of services amounted to LTL 147 million (LTL 93.6 million in September).Compared to October 2002, export of services decreased by 0.6 per cent, while import of services contracted by 8.1 per cent.The positive balance of services improved over the period under comparison by LTL 23.2 million.

Payments to non-residents (on their investment in Lithuania) in October 2003 exceeded the income from Lithuania’s investment abroad by LTL 0.9 million only.However, the positive labour income balance amounted to LTL 16.2 million.For the above reasons, the total income balance was positive (LTL 15.3 million).Compared to October 2002, the total income balance improved by LTL 45.0 million.

The balance of current transfers declined by LTL 14.1 million in October 2003, in comparison with September, and amounted to LTL 40.9 million.

The positive capital and financial account balance made up LTL 28.5 million in October.Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, went down by LTL 196 million in October, while international financial liabilities increased by LTL 389.4 million.The balance of non-repayable capital transfers amounted to LTL 4.2 million in October.

Foreign assets of domestic commercial banks decreased by LTL 237.5 million in October 2003.The largest decrease was recorded in commercial bank deposits and correspondent account balances with foreign banks.Foreign assets of other sectors went up by LTL 41.5 million.

Foreign direct investment flows in Lithuania amounted to LTL 58.5 million in October 2003, of which the largest (LTL 49.5 million) were non-resident investments in equity capital.

The investment portfolio of non-residents contracted by LTL 50.4 million in October.Over the month under review, the sale of shares of domestic economic entities by non-residents in the secondary market amounted to LTL 12.1 million, while the holdings of Lithuanian debt securities by non-residents declined by LTL 38.3 million.Other investment of non-residents grew by LTL 389.9 million in October.This indicator was determined by the growth of the debt of domestic economic entities (non-banks) for goods and services and the increase of foreign loans and non-resident deposits in domestic commercial banks.

The positive reserve asset flows in the balance of payments amounted to LTL 561.1 million in October 2003 (almost 2.2 times more than in September).The main reason behind the increase of international reserves was net purchase of the foreign currency by the Bank of Lithuania from commercial banks of LTL 336.6 million.The reserves were pushed up by LTL 188.8 million by foreign exchange operations of the central government at the Bank of Lithuania. The reserves were also increased by LTL 22.2 million by Bank of Lithuania repurchase transactions with non-residents and net inflows of the Bank of Lithuania from investment in foreign currency.