Ukraine gross reserves decrease 5% in March

Ukraine’s gross international reserves amounted to USD
27.04 bln as of end-March, the National Bank (NBU) reported on April 7. Gross
reserves cover 4.3 months of future imports, the NBU stated.

The reserves decreased 5% m/m due to large debt
servicing outlays. In particular, the government spent USD 571 mln for coupons
on international Eurobonds and USD 325 mln for the repayment and servicing of
local Eurobonds as well as paying USD 508 mln to the IMF. This was partially
offset by USD 474 mln in proceeds from the placement of local Eurobonds.
Another driver of the decline was the USD 250 mln decrease of market value of
financial instruments held by the NBU. Meanwhile, the NBU increased gross
reserves by USD 50 mln via the purchase of dollars on the ForEx market.

Alexander Paraschiy: In April, government outlays related to debt repayment and servicing
will be moderate (about USD 380 mln) which can be potentially offset by new
dollar borrowings on the local market. We do not expect any large ForEx
operations by the NBU this month, so if there is no other decline in the value
of the NBU’s portfolio, Ukraine’s gross reserves are likely to be flat m/m by
the end of April.