Ukraine November gross reserves stay flat

Ukraine’s gross international reserves underwent no
significant changes in November, staying flat at USD 26.1 bln after dropping
1.5% m/m in October, the National Bank of Ukraine (NBU) reported on Dec. 7. The
outlays consisted of the redemption of domestic and external state obligations
and the NBU’s interventions at Ukraine’s forex, which were offset by new
government borrowing in foreign currency.

The foreign currency inflow related to the
government’s operation in November amounted to USD 356 mln (in the equivalent),
including USD 346 mln (in the equivalent) of receipts  from the placement
of local Eurobonds.  At the same time, the total volume of payments
related to the redemption and servicing of the state debt in foreign currency
amounted to USD 320 mln. This included USD 43 mln channeled to the redemption
and servicing of local Eurobonds and USD 73 mln paid to the IMF.

The NBU’s net sale of foreign currency at Ukraine’s
forex during November amounted to USD 46 mln. The NBU also reported a USD 78
mln increase in the value of its securities portfolio.

As of Dec. 1, Ukraine’s gross reserves amounted to 4.3
months of imports, the NBU said.

Evgeniya Akhtyrko: The
stabilization of the situation at Ukraine’s forex eliminated the need for
significant NBU interventions at the market during the month. The outlays
related to the redemption of local Eurobonds were rolled over by new placements
of new Eurobonds.

December is going to be relatively easy in terms of
payments on state obligations in foreign currency. Ukraine has no scheduled
payments to the IMF until Feb. 1. The payment related to the redemption of
local Eurobonds for USD 376 mln is likely to be rolled over by new placements
of local bonds in December. We expect the situation at Ukraine’s forex will be
relatively stable, and interventions in the market will not be significant, if
at all.

Ukraine’s gross international reserves at the end
of 2020 will depend on whether or not MinFin manages to come up with a new
placement of international Eurobonds within the nearest two weeks. We expect
this borrowing to be at USD 1-3 bln.