Ukraine gross reserves climb 3% in October

Ukraine’s gross international reserves increased by
USD 0.95 bln, or 3.3% m/m, to USD 29.7 bln in October, the National Bank of
Ukraine (NBU) reported on Nov. 5. The increase was mostly related to the
purchase of foreign currency by the NBU at Ukraine’s ForEx market. In October
the net purchase of the foreign currency amounted to USD 703 mln.

In October, the foreign currency inflow to the
government’s accounts amounted to USD 1.1 bln. It included the tranche from the
European Commission of EUR 589 as well as receipts form the placement of local
Eurobonds amounting USD 432 mln. At the same time, the government spent USD 912
mln for the redemption and servicing of debts in foreign currency, including
USD 685 mln for the redemption and servicing of local Eurobonds. In addition,
the NBU paid USD 87 mln to the IMF.

The NBU also reported a USD 99 mln increase in the
value of its securities portfolio.

As of Nov. 1, Ukraine’s gross reserves amounted to 3.9
months of imports, the NBU said.

Evgeniya Akhtyrko: A favorable
ForEx situation helped the NBU to increase the purchase of foreign currency in
October and escape the drop of gross international reserves amid weak receipts
from the sale of local Eurobonds during the month.

In November, the major government payment in
foreign currency will include the redemption of local Eurobonds for EUR 214
mln. In addition, Ukraine is to repay the IMF around USD 29 mln. We expect
these outlays to be compensated by receipts from new placements of local bonds
as well as by the NBU’s purchase of foreign currency at ForEx market. Should
the NBU remain an active buyer at the ForEx, we might see another increase of
international reserves in November.