Foreign direct investments slowed down in February against the same month of 2010, but the cumulated amount recorded in the first two months of the year was double as much as in the similar period of last year, as a result of financial support from foreign parent companies to Romanian subsidiaries.

According to data from the NBR (National Bank of Romania), intra-group loans amounted to 267 million euros in the first two months of the year, while equity stakes amounted to 27 million euros.

After January saw direct foreign investments exceed the level recorded in the first month of last year eight times, reaching 240 million euros, in February they were half of what they were in February 2010, just 54 million euros.

That the current account deficit is fully financed through direct foreign investments is a positive fact, in addition to the export trend, which exceeded all expectations, comments Florian Libocor, chief economist of BRD-SocGen.

"The trend of the balance of payments continues to be a pleasant surprise overall, and in particular as far as the balance of trade is concerned. The trend of exports has exceeded all expectations and, given the progression of the forex market, this confirms that it is not the exchange rate that generates the healthy competitiveness of exports."

The current account deficit, which measures net foreign currency outflows generated by current trade operations, fell to 29 million euros in February, compared with 636 million euros in the similar month of 2010. In the first two months of the year, the current account deficit was 44 million euros, 17 times lower than in the same period of last year.

As for current transfers, up by around 60% against the similar period of last year, Libocor believes there are chances for the trend to continue as the recovery of Western European markets, where Romanian resid