Ukraine’s international reserves as of May 1, 2023, according to preliminary data, amounted to $35 billion 943.2 million, reaching a record high level for the last 11 years (since August 2011), the National Bank of Ukraine said.
“In April, reserves increased by 13% (by $4.065 billion) due to receipts from international partners amid a further decline in the net sale of currency by the National Bank and moderate debt payments of the country in foreign currency,” the central bank pointed out.
He specified that $5.852 billion arrived at the foreign currency accounts of the government at the National Bank in April, including $2.707 billion – within the framework of a new program of expanded funding by the IMF, $1.653 billion – macrofinancial assistance from the EU, $1.25 billion – a grant from the U.S. (through a World Bank trust fund) and $0.243 billion – from placement of foreign currency bonds of internal government bonds (IOB).
According to Interfax-Ukraine, the influx of foreign aid in April was the largest since the start of the war.
Also, the Ukrainian government paid $446.0 million for servicing and repayment of public debt in foreign currency, of which $282.7 million was for servicing and repayment of foreign currency OVGZ, $113.1 million was debt to the World Bank, the rest was debt to other international creditors. In addition, Ukraine paid $107.4m to the International Monetary Fund.
The NBU added that its net sale of currency in April declined for the fourth month in a row, decreasing compared to March by $0.299 billion – to $1.370 billion.
“Such dynamics in April is due to both industry factors (reduction of energy imports, increased sales of currency for the sowing season, a certain activation of mining and metallurgical enterprises), and the subsequent restriction of unproductive capital outflows from Ukraine,” the regulator pointed out.
Besides, the NBU’s consistent monetary policy aimed at improving the attractiveness of hryvnia assets and the refusal to finance the budget deficit directly in 2023 contributed to the stabilization of exchange rate expectations, the central bank added.
In addition, as a result of changes in market values and exchange rates, the value of financial instruments in reserves increased by $128.7 million.
The current volume of international reserves provides funding for 4.7 months of future imports, said the National Bank.
As previously reported, in late April, the NBU raised its forecast of international reserves of the country by the end of 2023 to $34.5 billion from $27 billion in the January forecast.
Ukraine’s international reserves increased by early May 2021, according to preliminary data, to $28 billion (equivalent), which is 3.6% more than in early April 2021 ($27.035 billion), the National Bank of Ukraine (NBU) has said on Friday.
“As of May 1, 2021, Ukraine’s international reserves, according to preliminary data, amounted to $28 billion (equivalent). In April, they increased by 3.6%, taking into account foreign exchange receipts in favor of the government and the revaluation of financial instruments,” the NBU said.
Ukraine’s international reserves in 2019 increased by 22% and amounted to $25.3 billion as of January 1, 2020, the National Bank of Ukraine (NBU) said on its website.
“This amount of reserves not only exceeded the latest forecast of the National Bank ($23 billion in equivalent, according to the Inflation Report for October 2019), but also reached a seven-year high: the last time a greater volume was recorded back in December 2012,” the NBU said.
At the same time, the release states that the National Bank managed to increase international reserves in general by $4.5 billion per year due to the continued favorable situation in the foreign exchange market, which is due to a further acceleration of economic growth and a steady influx of foreign capital into the country.
The NBU notes that the buildup of international reserves occurred in the year of double elections and peak payments on external public debt, which is an additional evidence of the strengthening of macro-financial stability in the country.
During 2019, the supply of currency in the interbank market significantly exceeded the demand. A high level of supply was provided by Ukrainian exporting companies, primarily farmers, who, despite a slight deterioration in the terms of trade in the world markets, increased sales, as well as foreign investors who sold $4.3 billion to buy hryvnia-denominated government bonds. External financing was actively attracted by state and private companies. At the same time, importers’ demand for foreign currency was moderate, in particular due to lower world energy prices. The volume of repatriation of business dividends abroad was also smaller, the report said.
According to the release, over the year, the National Bank’s net purchase of foreign currency amounted to $7.9 billion, which is the highest figure in the last 14 years.
Active currency sales by the private economic sector, state-owned companies, as well as foreign investors allowed the NBU to replenish international reserves in December by $2.933 billion (net purchase of foreign currency). In particular, $1.743 billion was bought at a single rate, $510 million – by choosing the best rate and $730 million – at auction. At the same time, in order to smooth out fluctuations towards the depreciation of the hryvnia, the NBU in December sold $50 million at a single rate during one trading day.
According to the report, in December, $220.3 million was sent for servicing and repaying the state debt in foreign currency, including $181.3 million paid on government domestic loan bonds. These expenses were offset by revenues of $514 million, including $259 million and EUR 198 million from the placement of government bonds denominated in foreign currency.
The size of international reserves was also affected by the revaluation of financial tools (changes in the market value and the hryvnia exchange rate against foreign currencies). Last month their value increased by $143.6 million.
At the same time, the regulator said that the current volume of international reserves covers 3.9 months of Current External Payments (CXP) and is sufficient to meet Ukraine’s obligations and current operations of the government and the NBU.
