NBU reserves up 6% to USD 34.7 bln in September

According to the NBU, foreign reserves were up USD 2 bln or 6% during September. The growth was primarily due to a USD 2 bln sovereign Eurobond placement. Eurobonds now constitute 82% of Ukraine’s total short–term external liabilities. At the same time, in the domestic forex market demand exceeded supply during September and the NBU has to sell net (for the first time since February) USD 669 mln to keep UAH depreciation within reasonable parameters. (The UAH depreciated 0.6% during September but has strengthened 0.5% YTD). Excessive supply in the local forex market was explained by a seasonal increase in economic activity and a widening current account deficit.