Ukraine gross reserves drop 1% to USD 18.2 bln in March

Ukraine’s gross international reserves declined 1.2%
m/m, or USD 219 mln, to USD 18.2 bln, the National Bank of Ukraine (NBU)
reported on Apr. 5. The reserves losses were mostly due to FCY-denominated debt
repayments that exceeded receipts from a local Eurobond placement and net
currency purchases by the central bank on the ForEx.

Eurobond debt repayments and servicing totaled USD 1.3
bln, including USD 679 mln in payments and servicing on local Eurobonds and USD
562 mln on international Eurobond servicing. In addition, the March portion of
the IMF debt repayment totaled USD 186 mln. The NBU also reported on a
securities revaluation at USD 43 mln, which is an adjustment to market value and
currency exchange rate).

At the same time, the placement of local Eurobonds
restocked reserves by USD 670 mln and EUR 123 mln. The net purchase of currency
during the month amounted to USD 376 mln and contributed to reserves
replenishment. By the end of March, gross international reserves covered 3.4
months of future imports.

Evgeniya Akhtyrko: The March drop in gross international reserves was in line with our projections. The NBU will have a good chance to replenish its
gross international reserves in April as no major FCY-denominated debt
repayments are scheduled for this month. The only source of reserves
replenishment will be central bank’s currency purchases on the ForEx. We expect
the gross reserves to increase by about 2.0% in April assuming the NBU’s net
currency on the ForEx will amount to USD 400-500 mln.