Ukraine gross reserves decline 9% in September

Ukraine’s gross international reserves declined by USD
2.9 bln, or 9.2% m/m, to USD 28.7 bln in September, the National Bank of
Ukraine (NBU) reported on Oct. 8. The decline was mostly related to year-peak
payments on international debt.

In September, the government spent USD 2,557 mln for
the redemption and servicing of debt in foreign currency. The NBU also reported
a USD 202 mln decline in the value of its securities portfolio.

At the same time, the government receipts from the
placement of local Eurobonds during the month amounted to USD 217 mln. In
addition, the net purchase of foreign currency by the NBU at the ForEx market
totaled USD 139 mln.

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

Evgeniya Akhtyrko: The decline
of gross international reserves in September was in line with our expectations. The monthly
decline of reserves in was close to their increase achieved in August.

In October, the major government payment in foreign
currency will include the redemption of local Eurobonds for USD 662 mln. In
addition, Ukraine is to repay the IMF around USD 86 mln. These outlays will be
partially compensated by receipts from new placements of local bonds. In
addition, the NBU is likely to buy more foreign currency at the ForEx market if
the appreciation pressure endures. The decline of gross international reserves
in October is not likely to exceed 1% m/m.