Current account surplus up in October as exports exceed imports and as a result of other factors
In October, the current account surplus in the balance of payments increased month-on-month, reaching 28.7 mil. lats.
The current account surplus increase was determined by the improvement of all the main components. The trade balance of goods and services turned positive, i.e. exports exceeded imports by 7.2 mil. lats. As the overall trade activity regarding both goods and services decreased, mostly the value of services received (particularly financial services) contracted. The negative balance of the revenue account shrank month-on-month as the amount of the reinvested profits of the foreign direct investment enterprises dropped whereas the increase in the transfer account surplus was materially affected by revenue from the CO2 emissions quotas sold by the Government.
The financial account balance was positive in contrast to the previous month, for a larger portion of the international loan was received compared to September (200 mil. euro from the European Commission as opposed to 100 mil. euro from the World Bank in September). The Latvian commercial banks also attracted more non-resident deposits, placing them mostly in foreign assets. As financial inflows increased, so did the amount of reserve assets.