8 November 2011
The National Bank of Ukriane’s gross reserves dropped by USD 0.8 bln or 2.3% m-o-m to USD 34.2 bln in October, the NBU reported yesterday. Svetlana Rekrut: October’s decline is 3x less compared to the previous month and in our view is a positive signal that pressure on the FX market have eased. Taking into account the foreign exchange effect on reserves, we estimate the NBU’s net sale interventions totaled USD 1.3 bln in October, well below September’s USD 2.0 bln. Based on October’s data, we think the probability of a sharp one-off hryvnya depreciation is much lower than a month ago. We maintain our ‘base-case’ forecast of the UAH/USD exchange rate at 8.0 at yearend.