Ukraine July gross reserves increase 1%

Ukraine’s gross international reserves increased 1.0%
m/m, or USD 0.3 bln, to USD 28.8 bln in July after jumping 12.4% m/m in June,
the National Bank of Ukraine (NBU) reported on Aug. 7. The increase was mostly
the result of international bond placements.

In June, foreign currency inflow related to the state
debt was USD 1.75 bln, including USD 1.1 bln from the placement of
international bonds and USD 0.6 bln from the placement of local Eurobonds. At
the same time, the redemption and servicing of the state debt in foreign
currency during the month required USD 1.5 bln. In particular, the outlays
related to the redemption and servicing of local Eurobonds amounted to USD 767
mln, while the rest of outlays was related to the obligation to international
lenders.

During the month, the NBU net foreign currency sale at
Ukraine’s Forex amounted to USD 369 mln. The NBU also reported a USD 406 mln
rise in the value of its securities portfolio.

As of Aug. 1, Ukraine’s gross reserves amounted to 4.9
months of imports, the NBU said.

Evgeniya Akhtyrko: The placement
of international Eurobonds helped to avoid a decline in international reserves
amid increased turbulence at the local financial market. This resulted in
intensified sale of foreign currency by the NBU at the local Forex, as well as
relatively moderate receipts from the placements of local Eurobonds.

In August, the major foreign currency outlays will
involve the redemption and servicing of local Eurobonds of USD 496 mln, as well
as an IMF payment of around USD 185 mln. These outlays will be partially
compensated by receipts from the placements of local Eurobonds.

Meanwhile, the situation at Ukraine’s Forex remains
vague, and we don’t expect the NBU to be able to boost the purchase of foreign
currency during the month.