In September 2016, the current account deficit widened to USD 875 million. 

The widening of the deficit was primarily due to scheduled interest payments on the restructured Eurobonds made by the Government of Ukraine.

Unfavorable terms of trade led to a decline in merchandise exports in both annual and monthly terms. Despite an increase in grain export volumes,  grain export values have declined, weighed down by a slump in global grain prices. Exports of metallurgical products followed a similar downward trend, reflecting a decline in global steel prices. At the same time, exports of fats and oil rose sharply due to an abundant sunflower harvest.

The growth of merchandise imports has slowed down. The slowdown in merchandise imports growth was primarily attributed to lower annual growth rates of imports of agricultural machinery.  

In September, the financial account recorded a net inflow of USD 1.3 billion.

In contrast to previous months, the financial account net inflows were underpinned by public sector borrowings.  The successful completion of the second review under the EFF with the International Monetary Fund has enabled the Government to issue a USD 1 billion worth of U.S.-guaranteed Eurobonds.

Net FDI inflows have increased to USD   444 million, including USD  264 million directed to the corporate sector.   FDI to the banking sector (USD 180 million) were used for the recapitalization of banks with foreign capital.

The FX cash outside banks has increased compared to August.

Net debt outflows from the corporate and banking sectors have increased to USD 480 million and USD 452 million respectively, primarily reflecting  significant repayments of long-term loans and still-low private sector borrowings. 

 As a result, the balance of payments showed a surplus of USD 474 million in September.

 In January-September 2016, the current account balance recorded a deficit of USD 2.3 billion. However, the current account deficit was offset by net inflows on the financial account. As a result, the overall balance of payments recorded a surplus of USD 1 billion.

The updated data for September 2016 is available under External Sector Statistics.

See the Macroeconomic and Monetary Review (October 2016) for greater details on macroeconomic developments in September 2016, which will be published on 31 October 2016.