Ukraine gross reserves climb 3% in November

Ukraine’s gross international reserves increased by
USD 0.89 bln, or 3.0% m/m, to USD 30.5 bln in November, the National Bank of
Ukraine (NBU) reported on Dec. 7. The increase was mostly due to the IMF second tranche to Ukraine
under the Stand-By Arrangement of USD 0.7 bln.

In November, the foreign currency inflow to the
government’s accounts amounted to USD 493 mln. It included a loan from Cargill
Financial Services International for EUR 250 mln as well as receipts form the
placement of local Eurobonds amounting to EUR 167 mln. At the same time, the
government spent USD 482 mln for the redemption and servicing of debts in
foreign currency, including USD 251 mln for the redemption and servicing of local
Eurobonds. In addition, the NBU paid USD 64 mln to the IMF.

The net purchase of foreign currency by the NBU at the
ForEx market totaled USD 385 mln.

At the same time, the NBU reported a USD 136 mln
decline in the value of its securities portfolio.

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

Evgeniya Akhtyrko: The
unexpectedly early IMF decision on issuing another loan to Ukraine helped the country
to enter the new wave of increased uncertainty related to the growing risks of
Russia’s military aggression as well as the newly emerged stand-off between President
Zelensky and Ukraine’s wealthiest oligarch Rinat Akhmetov with a healthy
position regarding gross international reserves. At least for a while, this
macroeconomic indicator is not a matter for concern.

In December, the major government payment in foreign
currency will include the redemption of local Eurobonds for USD 573 mln. In
addition, Ukraine is to repay the IMF around USD 170 mln. These outlays are not
likely to be fully compensated by receipts from new placements of local
Eurobonds and the NBU’s operations at Ukraine’s ForEx market. If the situation
at the ForEx market doesn’t improve, allowing the NBU to renew the purchase of
the foreign currency, the decline of gross international reserves of up to 1%
is possible in December.