NBU Currency Reserves Up 3.6% in October

The National Bank of Ukraine said yesterday that its foreign currency reserves grew 3.6% in October to USD 31.7 bln. The moderate current account deficit, and growing inflows of FDI and portfolio investments are bringing an excess supply of foreign currency to the local FX market, forcing the NBU to intervene in order to prevent a hryvnia revaluation. We expect the hryvnia to be allowed to strengthen in 1Q08 after the establishment of a new government.