Ukraine’s FX reserves in August 2020 tentatively expanded by 1%, to $29.049 billion, according to a Monday posting on the website of the National Bank of Ukraine (NBU).
“As of September 1, 2020, Ukraine’s FX reserves amounted to $29.049 billion (equivalent), according to preliminary data. In August, they increased by 1%, primarily due to the favorable situation in the FX market,” the NBU said in the statement.
According to the central bank, the dynamics of reserves was influenced by its operations in the interbank FX market. In August the regulator bought $460.5 million and did not carry out operations to sell foreign currency. “In August, the supply of foreign currency exceeded demand and the NBU could replenish FX reserves,” the central bank said.
According to the report, the dynamics of reserves in August was also affected by FX earnings in favor of the government in the amount of $250.5 million from the sale of government domestic loan bonds denominated in foreign currency.
At the same time, the government allocated $645.2 million to repay the state debt in foreign currency, including $496.5 million on government bonds denominated in foreign currency, and the rest of the funds were provided for obligations to foreign creditors.
In August the government and the NBU paid $204.5 million to the International Monetary Fund (IMF).
In addition, the dynamics of the indicator in August was influenced by the revaluation of financial instruments (changes in the market value and the exchange rate of the hryvnia versus foreign currencies). Last month their value grew by $385 million in equivalent, according to the National Bank.
The regulator said that as of September 1, 2020, the volume of FX reserves covers 4.8 months of Current External Payments (CXP). This is enough to fulfill the obligations of Ukraine and the current operations of the government and the NBU.
According to the data posted on the website of the National Bank, its net FX reserves, which are calculated as the excess of gold and FX reserves over the central bank’s liabilities in foreign currency, increased by $339.31 million in August, to $17.813 billion after a decrease in July by $21.27 million.
In general, in January-August 2020, the NBU’s net FX reserves grew by 12.9%, or by $2.029 billion.
