Ukraine gross reserves rise 0.9% to USD 18.9 bln in November

Ukraine’s gross international reserves rose 0.9%, or
USD 170 mln, to USD 18.9 bln driven by the sale of local Eurobonds (USD 664
mln) and net dollar internvetions (USD 138.9 mln net purchase), the National
Bank of Ukraine (NBU) reported on Dec. 5. The main spending consisted of USD
447.1 mln in redemptions to the IMF and USD 358.3 mln in repayments and
servicing of state debt (USD 282.2 mln on local Eurobonds). Also the NBU
returned USD 100 mln under SWAP operations.

By the end of November, gross international reserves
covered 3.7 months of future imports.

Alexander Paraschiy: The rise in
gross reserves was a positive surprise considering we believed reserves would
have slid on IMF redemptions and Eurobond repayments. Also we assumed the NBU
interventions would depress reserves amid persistent depreciation pressure at
the ForEx. The latest local Eurobonds issue covered almost all external
repayments but it’s not clear how it happened that the ForEx generated surplus
amid the trend of a widening trade deficit. 

The November results mean that we can expect better
gross reserves in 2017 than we initially expected (USD 18.0 bln).  We
still anticipate reserves slightly dropping in December (to be partially offset
by local Eurobond placements) and we project USD 18.6 bln in reserves by the
end of 2017.