Ukraine cuts deficit of current account in Feb by 41%, deficit of financial account almost 17% up

The deficit of the current account of Ukraine's balance of payment in February 2014 came to $121 million, which is 41% down on January 2014 ($205 million) and 12.2 down year-over-year ($1.474 billion), reads a posting on the Web site of the National Bank of Ukraine (NBU).

According to the report, the deficit of the financial and capital
accounts reached $2.018 billion in February 2014, which is 16.7% up on
January 2014 ($1.73 billion). In February 2013, the surplus of the
financial and capital accounts amounted to $2.771 billion.

According to the NBU, the deficit of the current account fell due to a
sharp decline in the volume of imported goods due to the reduction of
the economic activity and the hryvnia devaluation, while the deficit of
the financial account grew under the pressure of the unstable economic
and political situation in the country and the weakening of the national
currency.

According to the central bank, the deficit of Ukraine’s balance of
payment in February 2014 reached $2.139 billion, while in January 2014
it stood at $1.935 billion and in February 2013 the surplus of $1.297
billion was seen.

The NBU said that in annual terms exports of goods decreased by 7.4%, to $4.9 billion and imports – by 21.7%, to $5.4 billion.

“Strengthening of devaluation expectations and outflow of deposits
from the banking system have resulted in growth in outflow of cash
foreign currency to the off-bank market to $1.9 billion, while in 2013
it totaled $3.3 billion. Outflow of foreign direct investments was also
seen ($209 million), as well as outflow of credits and bonds of the
private sector,” reads the report.

The NBU also said that the scheduled payment of $360 million under
the IMF’s loan affected the indicators of Ukraine’s balance of payment.

Indicators of Ukraine’s balance of payment ($):