INSTANT VIEW 3-Czech Aug C/A gap in line with fcast

                                
 PRAGUE, Oct 13 (Reuters) - The Czech current account posted
a deficit of 12.17 billion crowns ($676.1 million) in August, in
line with the market forecast of a 12.0 billion crown gap, data
showed on Monday.
                                
 The 12-month rolling deficit narrowed month-on-month to 68.9
billion crowns, or 1.9 percent of last year's estimated gross
domestic product (GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)            Aug         July          Aug forecast
Current Account         -12.17        -0.31        -12.00
Financial Account        15.03         4.78          n/a
Net Direct Investment    11.14        15.89          n/a

 (For full table, double click on [ID:nPRA002167])

- The current account deficit reached CZK 12.2 billion in
August, owing to a 24.32 billion deficit on the income balance
(dividend payments).
- The trade balance and the services balance ran a surplus. The
balance of current transfers included a surplus of CZK 1.5
billion on transfers from the EU budget to the Czech Republic. As
for the capital account, a net total of CZK 0.9 billion was
drawn from the EU budget.
- Capital inflow on the financial account was around CZK 15
billion under ECB methodology.
- The net inflow of direct investment was CZK 11.1 billion, of
which net estimated reinvested earnings were around CZK 9
billion. Portfolio investment outflow was CZK 1.2 billion. The
annual net direct investment inflow total has been increasing
slightly.
- The 12-month portfolio investment total recorded a surplus due
to foreign bond issues in recent months. The government raised 2
billion euros in 10-year euro bonds this year.
- Other investment showed a surplus of CZK 9 billion, owing to a
change in the short-term international position of banks. The
government sector drew on an EIB loan of CZK 3.2 billion for
transport infrastructure construction and water management
projects.

COMMENTARY:
                                
 MICHAL BROZKA, ANALYST, RAIFFEISENBANK
                                
 "The deficit of the current account is in line with
expectation so I do not expect a market reaction."
                                
 "The Czech crown is currently more interested in external
impulses rather than the domestic economy."
                                
 "Weakening demand and shrinking willingness to invest in
emerging markets point to a worsening of the current account
balance in the Czech Republic next year, which is an argument
why to expect a weakening of the crown."
                                
 
                                
 MIROSLAV PLOJHAR, ANALYST, JP MORGAN   
                                
 "The data is not something that could move markets as trends
remain the same."
                                
 "The crown is still seen as a safe haven currency."
                                
 "If the crown should weaken then it will not happen until
the weakening of the economy is more perceptible."
                                
 "This plays for the fact that the CNB (central bank) will
have to cut rates."
                                
 
                                
 PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
                                
 "It is no surprise for markets. The only negative item was
the income balance which was also expected. The basic balance,
meaning FDI (foreign direct investment) minus current account,
is close to zero.
                                
 "I think we will see the same picture more or less for the
rest of the year. The current account may slightly deteriorate
versus the previous year because of higher outflows through the
income balance, but other items should stay okay."
                                
 
MARKET REACTION:
                                
 The crown, boosted by a European plan to help ailing banks,
showed no visible reaction to the data. It stood a touch firmer
at 24.53 to the euro <EURCZK=> at 0814 GMT, from 24.56 ahead of
the data.
                                
 
                                
 
BACKGROUND:
- Analyst expectations before data release         [ID:nLT61096]
- Czech Aug foreign trade figures                 [ID:nL3333652]
                                
                                               [ID:nL3432685]
- Polish July C/A                                 [ID:nLC722673]
- Slovak July C/A gap                            [ID:nPRG001030]
- Hungary's Q2 C/A gap                            [ID:nLU650028]
- Report on last Czech c.bank rate decision.......[ID:nLP705205]
                                
                              [ID:nPRA002139] [ID:nPRG001022]
 
LINKS:
- For further details on August of payments numbers and past
data, Reuters 3000 Xtra users can click on the Czech National
Bank's website:
                                
 http://www.cnb.cz/en/statistics/bop_stat/

- For LIVE Czech economic data releases, click on       <ECONCZ>
- Instant Views on other Czech data                 [CZ/INSTANT]
- Overview of Czech macroeconomic indicators            [CZ/ECI]

- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH]
- For Czech money markets data click on                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova; Editing by Michael Winfrey)