Ukraine’s forex reserves in May 2018 narrowed by 1.6%, reaching $18.12 million as of June 1, 2018, the National Bank of Ukraine (NBU) has published the preliminary data on its website. The central bank said that the reduction of the forex reserves is linked to payments on state debt. “Some $455.1 million was paid to the International Monetary Fund (IMF), $214.4 million to service and pay the government’s debt in foreign currency, including $126.2 million on government domestic loan bonds and $18.5 million on sovereign bonds,” the NBU said.
The main source of expanding the reserves in May was the purchase of foreign currency in the interbank market. According to the NBU, high prices for Ukrainian exports (metals, ore and grain) contributed to stable currency inflows, as well as an increase in the supply from banks, which the central bank expanded from the beginning of April to conduct its own operations with foreign currency on the interbank market.
In general, the National Bank in May bought out $181.2 million in the interbank market. All purchases were made in the form of interventions at the best rate.
In addition, last month, the reserves received $272.3 million and EUR 64.6 million from the placement of government domestic loan bonds denominated in foreign currency by the government.
The volume of reserves was also affected by the revaluation of financial tools (change in market value and the exchange rate of the hryvnia against foreign currencies) by $162.3 million.
In general, as of June 1, 2018, the volume of international reserves covers 3.2 months of future imports and it is sufficient to fulfill Ukraine’s obligations and current operations of the government and the National Bank.