In October 2016, the current account deficit narrowed to USD 234 million.

• The narrowing of the current account deficit was primarily due to the reversal in the primary income account from a deficit to a surplus after the scheduled interest payments on restructured Eurobonds were made in September.
• Meanwhile, merchandise exports and imports remained broadly flat in seasonally-adjusted monthly terms.
• Following a seasonal pattern, grain exports, primarily corn exports, increased in October. Sugar exports also rose thanks to the expansion into new markets and higher supplies of gas-turbine engines to India and the Russian Federation.
• However, metallurgical exports declined in October due to the temporary difficulties with the supply of raw materials faced by exporters and major turnarounds at some metallurgical plants. Exports of sunflower oil also recorded a month-on-month decline in seasonally adjusted terms.
• Investment imports continued to trend downwards. In particular, imports of agricultural machinery continued to decline for the second month in a row due to difficulties associated with the registration of agricultural machinery and a high comparison base in the previous periods.

The financial account net inflows (USD 311 million) were backed by the private sector.

• As in the previous month, the financial account performance was strongly underpinned by a reduction of FX cash outside banks.
• Net debt inflows were yet another significant contributing factor to the financial account surplus. Unlike in previous months, net debt inflows were directed to both the corporate and banking sectors.
• The redemption by the government of foreign-currency-denominated domestic sovereign bonds held by nonresidents led to a USD 298 million decline in public sector liabilities.

However, following the completion of the recapitalization program for the largest foreign-owned banks, the corporate sector became the sole recipient of FDI inflows (USD 45 million).

As a result, the balance of payments recorded a surplus of USD 91 million in October.

 In January-October 2016, the current account balance recorded a deficit of USD 2.5 billion. However, the current account deficit was offset by the financial account net inflows. As a result, the overall balance of payments recorded a surplus of about USD 1 billion.

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

See the Macroeconomic and Monetary Review (November 2016) for greater details on macroeconomic developments in October, which will be published on 30 November 2016.