The improvement in the current account was primarily driven by a significant reduction in the gold trade deficit, which fell to $0.7 billion in February from $3.4 billion in the same month last year. Additionally, there was a notable recovery in net energy trade, with the deficit decreasing to $4.4 billion from $5.8 billion. Furthermore, the core trade balance shifted to a surplus of $0.6 billion, a turnaround from a slight deficit of $0.9 billion.
Despite the trade balance being a major contributor to the current account’s recovery, it was partly offset by a marginal increase in the services surplus and a decline in primary income. The 12-month rolling deficit saw a sharp decline to $31.8 billion, or approximately 2.9% of GDP, from $37.6 billion a month earlier, also reflecting a large base effect from February of the previous year. On the capital account side, identified net inflows were modest at $2.0 billion, following slight outflows in the month before.
The monthly data breakdown showed that inflows were primarily due to Eurobond issuance by the Treasury amounting to $3 billion and banks issuing $2.7 billion. There were also mild inflows from gross foreign direct investment ($0.4 billion), net borrowing ($0.1 billion), and non-resident deposits in the banking system ($0.1 billion).
Outflows were led by residents’ portfolio investments at $1.8 billion and acquisitions of financial assets abroad totaling $1.9 billion. In February, rollover rates for corporates and financials were at 133% and 111%, respectively, compared to 93% and 118% on a 12-month rolling basis.
Errors and omissions outflows, which have been ongoing since September, reached $5.0 billion in February, totaling $17.4 billion over the past 12 months. This coincided with the monthly current account deficit and a weak flow outlook, which resulted in the country’s official reserves standing at $6.2 billion after a similar decline in January.
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