Daily Insight-Central bank\'s releases on BoP in Feb. and FX market in Mar.; Ferrexpo and Mriya Eurobonds

According to preliminary estimates of the National Bank of Ukraine of the country\'s balance of payments (BoP), Ukraine\'s current account deficit grew to US$819m in 2M11, in contrast to a surplus of US$304m in 2M10, mainly on the back of sizeable natural gas imports. The rolling 12-month deficit reached US$4bn, or 2.9% of GDP. Exports grew fast, by 46.2%, to UAH9.4bn in 2M11, on the back of high world commodity prices and increased demand, predominantly on the part of Russia. Exports of ferrous metals grew 54%, chemicals 84%, and machinery 43%, in particular locomotives (up 2.2x) and cars (5.7x). Agricultural product exports grew 31%, based on exports of oil seeds (4.5x) and oil and fats (77%), while grain exports remained 40% below last year\'s level as the result of government imposed export quotas. However, imports (up 63.1%) in 2M11 grew considerably faster than last year: its main component, natural gas imports, grew 2.4x in cost in 2M11 (to US$3.3bn), compared with 2M10, even though the price was 13.5% lower in 2M11. Non-fuel imports also grew fast, by 48.3%, in 2M11. Such a fast growth of imports is linked with the general economic recovery in Ukraine, with real GDP growth estimated at 6.4% in 2M11, signalling revived consumer and investment demand. In particular, the imports of machine-building products rose 85% in 2M11, including 2.1x for cars.