OREANDA-NEWS. On 28 April 2009 was announced, that according to preliminary estimation of the NBU the Current Account (CA) Deficit amounted to USD 0.4bn in March 2009 and USD 0.8bn in 1Q2009. In particular, the Merchandise Trade Deficit was USD 0.6bn in March and USD 1.4bn in 1Q2009. Meanwhile, Service Trade Surplus amounted to 0.1bn in March and USD 0.4bn in 1Q2009. Total Current Transfers were equal to 0.6bn, while the negative Income Item stood at USD 0.4bn in 1Q2009. At the same time the Financial Account (FA) Deficit amounted to USD 0.9bn in March (down 60%, m/m) and USD 4.3bn in 1Q2009. The amount of Foreign Direct Investment remained quite low (USD 0.3bn in March and USD 0.7bn in 1Q2009). Total Balance of Payments Deficit accounted for 1.3bn in March and USD 5.2bn in 1Q2009. This resulted in a significant spending from the International Reserves of the NBU (down 20% to USD 25.4bn) in 1Q2009.

Millennium Capital sees the main reasons of CA deficit in 1Q2009 to be the accounting of payments for the natural gas imported in late 2008 in total imports calculation. Meanwhile there were no significant changes in other merchandise exports and imports amounts, which remained nearly the same in March 2009. In our view there are still no significant signs of exports acceleration, besides the agricultural products, which we expect to start in 2010, while remaining about the same in 2009. Overall Millennium Capital expects the Balance of Payments to continue to result in Deficit in the nearest months mainly due to the ongoing foreign debt redemption (USD 0.4bn in May and USD 0.2bn in June). Still the reserves of the NBU may slow down their exhausting if the temporary hryvnia revaluation takes place in May 2009 (see out desknote of 24.04.2009).

Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of the major investment banking institutions.