Ukraine gross reserves total USD 18.4 bln in February

Ukraine’s gross international reserves totaled USD
18.4 bln as of March 1, the same as the beginning of the prior month, the
National Bank of Ukraine (NBU) reported on March 6. Inflows from currency
purchases on the interbank ForEx, as well as the placement of local Eurobonds,
compensated for the outflows related to debt repayment.

In addition, inflows of capital from non-residents,
coupled with increased exporter receipts, boosted the currency supply on the
interbank market and enabled the central bank to purchase the excess currency
without hurting the ongoing hryvnia revaluation. The net purchase of currency
during the month amounted to USD 396.9 mln contributed to reserves
replenishment.

February’s currency inflow to reserves also reflected
currency receipts from the local bond placement on Jan. 30
in the amount of USD 137.4 mln, as cited by the NBU.

FCY-denominated debt repayment and servicing totaled
USD 536.8 mln, including a USD 465.9 mln payment to IMF, while local Eurobond
repayment and servicing demanded USD 70.9 mln.

Evgeniya Akhtyrko: The latest
reported data on gross international reserves is a bit misleading, failing to
take into account January reserves having been revised to USD 18.6 bln (instead
of USD 18.4 mln reported provisionally on Feb. 7).

Applying the updated January data results in a
February decline in gross reserves of USD 170.5 mln, or 0.9% m/m. The updated
data also indicates that January’s drop in reserves was 1.2% m/m instead of
2.0% m/m estimated earlier. The revised data on February’s gross international
reserves, which should be available on March 21, will give a better
understanding of how gross international reserves changed during the first two
months of the year.

It will be hard to build up gross international
reserves during March. The government will try to compensate losses related
FCY-denominated debt repayment of USD 1.4 bln (around USD 166 mln to IMF, USD
676 mln on local Eurobonds and USD 555 mln coupons on international Eurobonds)
with a local Eurobond auction scheduled for March 27 and currency purchases on
the interbank market. Most likely, reserves at the end of March will be
substantially below the February’s level.