NBU reserves down marginally in February

The National Bank of Ukraine’s gross international reserves declined 1% mom (USD 0.3 bln) in February to USD 31.0 bln, according to a release yesterday. The NBU also said it did not sell currency on the market in February, which is in sharp contrast to USD 0.9 bln in net sales in January.

Svetlana Rekrut: February’s data on NBU reserves is quite positive (and far above our expectations), indicating Ukraine’s external accounts remained fairly balanced, even though the private and public sectors faced sizable external debt redemptions last month (including the NBU’s repayment of USD 0.6 bln in debt to the IMF and Privatbank’s redemption of its USD 0.5 bln Eurobond). While we do not think February’s positive trend will persist in the coming months, it still clearly points to easing UAH depreciation pressure. The NBU has thus far been able to keep tight control of the local currency market via interventions and tightening administrative control. This gives us more confidence that hryvnia stability though 2012 is entirely manageable unless we see new major disruptions in global debt markets and related debt outflows from Ukraine.