Ukraine gross reserves fall 1.6% in November

Ukraine’s gross international reserves fell 1.6% m/m to USD 15.3 bln in November, the National Bank of Ukraine (NBU) reported on Dec. 5. Reserves declined USD 243.5 mln, mostly fuelled by USD 147.2 mln in debt-servicing costs, amid sluggish inflows that included USD 80 mln of net interventions at the ForEx and a USD 59.6 mln wire from the EU. By the end of November, gross international reserves were enough to cover nearly 3.6 months of imports.

Alexander Paraschiy: An EU macro-financial loan of EUR 600 mln might be the only source left for replenishing gross reserves this year. If parliament lifts its ban on timber exports, which is a key precondition for the loan, we will see gross reserves close to USD 16.0 bln by the end of December.

If Ukraine secures planned IMF loan tranches, it may increae its reserves to USD 21.4 bln by the end of 2017. However, given that such funding was recently denied owing to failure to fulfill requirements, reserves might only reach USD 18.0 bln without any IMF funding.