NBU reserves shrink 2.6% in August

The National Bank of Ukraine reported on Friday that its gold and foreign currency reserves decreased 2.6% mom in August to USD 28.9 bln. The NBU’s reserves are down 8.5% over 8M09. Mykyta Mykhaylychenko: In August, excessive demand for foreign currency prevailed on the domestic FX market, derived in large part from the retail market. Subsequently, the NBU spent USD 866 mln of its reserves to satisfy this demand. We expect foreign currency demand to exceed supply on the domestic market at least until the end of 2009, with the NBU keeping spending its reserves to support hryvnya.