Ukraine gross reserves stay at USD 21.4 bln in October

Ukraine’s gross international reserves stayed at USD 21.4
bln in October, showing an insignificant decline of 0.2% m/m, the National Bank
of Ukraine (NBU) reported on Nov. 6. The repayments of state debt were almost
fully compensated by new foreign borrowing and the purchase of foreign currency
by the NBU at the currency market.

The central bank reported total repayments and debt
servicing in foreign currency in October amounted to USD 632.3 mln (in the
equivalent). In particular, redemption and servicing of local Eurobonds
required USD 475.5 mln. The rest of foreign currency outlays were related to
Eurobond servicing and other obligations to foreign creditors and international
financial organizations.

At the same time, Ukraine attracted EUR 262.1 mln from
international partners (particularly, the European Commission). Despite the
fluctuations of the exchange rate, the amount of the foreign currency purchased
by the NBU on the ForEx exceeded the amount of currency sold during the month.
In particular, the net purchase of foreign currency by the central bank in
October amounted to USD 193.9 mln.

The central bank also reported an increase in the
value of its securities portfolio by USD 115.0 mln (adjusted to market value
and the currency exchange rate).

As of Nov. 1, Ukraine’s gross reserves amounted to 3.4
months of imports, the NBU said.

Evgeniya Akhtyrko: The
improved situation at the currency market in the second half of October helped
the NBU to avoid higher losses in foreign reserves. The major foreign currency
outlays in November will include EUR 503 mln on redemption and servicing of
local Eurobonds and around USD 92 mln on repayments to the IMF. The planned
placement of two-year, USD-denominated Eurobonds on Oct. 12 should help to
avoid significant losses in foreign reserves.

We also expect the government to continue with foreign
currency purchases at the ForEx. The amount of interventions, and therefore the
changes in reserves in November, will depend upon the situation on the currency
market. We expect the losses of gross international reserves in November are
not likely to exceed 1%.