UPDATE 1-Brazil's current account gap narrows in February
(Adds details on FDI, currency, background)
BRASILIA, March 24 (Reuters) - Brazil's current account deficit narrowed in February as the country's currency weakened sharply and economic growth remained stagnant, central bank data showed on Tuesday.
Brazil posted a current account deficit of $6.879 billion in February, less than market expectations for a deficit of $7.7 billion and a gap of $10.654 billion in January.
Despite the decline, Brazil's external deficit remained high as a percentage of the economy and was not fully covered by foreign direct investment, which was $2.769 billion last month.
In the 12 months through February, the deficit rose to 4.22 percent of Brazil's GDP, up from 4.17 percent in January.
Brazil's external gap has widened sharply in recent years as a drop in the value of major exports such as iron ore and soybeans pushed the trade balance into a deficit in 2014 for the first time in 14 years.
That trend is expected to change this year, economists say, as a sharp depreciation of the Brazilian currency against the U.S. dollar and an expected recession reduce demand for imports.
The current account deficit will probably narrow further in March to $5.5 billion, the central bank said. In 2015, the gap will likely amount to $80.5 billion, down from $91.3 billion in 2014 and from a previous estimate of $83.5 billion. Foreign direct investment is expected to reach $65 billion in 2015.
Brazil's currency, the real , traded at 3.13 per U.S. dollar on Tuesday, near 12-year lows. (Reporting by Luciana Otoni and Silvio Cascione; Editing by Chizu Nomiyama and James Dalgleish)
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