Ukraine October gross reserves drop 1.5%

Ukraine’s gross international reserves dropped 1.5%
m/m, or USD 0.4 bln, to USD 26.1 bln in October after declining 8.7% m/m in September,
the National Bank of Ukraine (NBU) reported on Nov. 6. The decline was the
result of repayment on domestic and external debts, as well as the sale of
foreign currency by the NBU at Ukraine’s ForEx.

The total payments of redemption and servicing of debt
in foreign currency in October totaled USD 381 mln. In particular, USD 213 mln
were channeled to the redemption and servicing of local Eurobonds, USD 78 mln
was spent on international Eurobonds servicing and the rest involved other
obligations in foreign currency. At the same time, the government receipts in
foreign currency totaled USD 188 mln.

The NBU’s sale of foreign currency at Ukraine’s ForEx
during October amounted to USD 191 mln. During the month, the central bank
didn’t purchase foreign currency at the market.

The NBU also reported a USD 1.1 mln decline in the
value of its securities portfolio.

As of Nov. 1, Ukraine’s gross reserves amounted to 4.4
months of imports, the NBU said.

Evgeniya Akhtyrko: The
relatively high level of reserves is helping the NBU to get smoothly through
periods of increased turbulence at Ukraine’s ForEx. In November, Ukraine will
make its last 2020 payment to the IMF of around USD 73 mln. In addition, the
government is to spend EUR 202 mln for the redemption and servicing of local
Eurobonds. The government is likely to compensate these outlays with receipts
from local Eurobond placements. In case the supply and demand at Ukraine’s
ForEx balances out, we are not likely to see significant changes in international
reserves at the end of November.