OREANDA-NEWS. November 24, 2009. According to the preliminary NBU data, the current account (CA) surplus in October 2009 amounted to USD 87mn, which resulted in a decrease of the total CA deficit to USD 1.0bn in 10M09. Namely, the exports of goods came to USD 4.2bn in October (USD 32.2bn in 10M09), while imports amounted to USD 4.4bn (USD 36.0bn), respectively. The main exports contributors were metallurgy (up 18.2%, m/m in October) and agriculture (up 7%, m/m). Meanwhile, imports growth was mainly accounted for by the growth of mineral product imports (16.4%). At the same time, the Financial Account (FA) deficit increased by USD 0.8bn in October to reach USD 11.9bn in 10M09. This resulted in a Balance of Payments (BOP) Deficit of USD 12.9bn in 10M09.

Millennium Capital sees the news to be neutral, since, notwithstanding the CA improvements, the FA deficit continues growing. The main drivers of the BOP deficit in October were loan repayments and bonds redemptions in both financial and real economy sectors (at USD 1.6bn). Due to our estimations, in November, the amount of external loan redemptions will be one of the lowest in the year. This, accompanied by further exports growth, an increase in foreign investment for bank capitalizations, and low hryvnia liquidity of the banking system, are the primary drivers for a slight hryvnia revaluation in the current months Still, Millennium Capital expects that the need to redeem foreign loans by economic agents in December, as well as a seasonal growth of imports and money emissions of the NBU may slightly devalue hryvnia by the end of the year.