Ukraine gross reserves rise 2% in March

Ukraine’s gross international reserves increased 2.1%
m/m, or USD 0.4 bln, to USD 20.6 bln in March after declining 2.9% m/m in the previous month, the
National Bank of Ukraine (NBU) reported on Apr. 4. The newly attracted
international debt and foreign currency purchases by the central bank on
Ukraine’s ForEx exceeded foreign currency outlays related to debt repayment and
servicing.

Among the loans, the government attracted
international financing for EUR 512 mln under a World Bank guarantee. Secondly,
the government received USD 357 mln from the placement of international
Eurobonds and USD 160 mln and EUR 5.4 mln from the placement of local
Eurobonds. Thirdly, the net purchase of foreign currency by the central bank
amounted to USD 162 mln. Finally, the National Bank reported the increased
value of its securities portfolio by USD 8.6 mln (adjusted to market value and
the currency exchange rate).

Foreign currency debt repayment and servicing in March
amounted to USD 866.5 mln. In particular, the debt repayment and servicing on
local and international Eurobonds reached USD 707 mln (in the equivalent). In
addition, USD 160 mln (in the equivalent) was spent on payments to the IMF.

As of Apr. 1, Ukraine’s gross reserves amounted to 3.4
months of imports, the NBU said.

Evgeniya Akhtyrko: The
placement of international Eurobonds for USD 357 mln was significant in
strengthening the country’s foreign currency stock. The country’s political
cycle – with presidential and parliamentary elections occurring both this year
– can’t be ruled out in the difficulties of attracting new debt in foreign
currency.

In April, Ukraine is to redeem local Eurobonds for USD
613 mln and EUR 70 mln. In addition, a payment of about USD 30 mln is scheduled
for the IMF. These outlays will be partially compensated by the placement of
new local Eurobonds and the purchase of foreign currency by the central bank on
the ForEx.

Given the relatively high level of debt repayments,
we expect gross reserves to lose USD 0.3 bln in April, ending the month at
around USD 20.3 bln.