Ukraine central bank agrees to USD 500 mln swap with Sweden

The National Bank of Ukraine (NBU) concluded an agreement with Sveriges Riksbank on a USD 500 mln swap, the bank reported on Sept. 16. The goal of the agreement is to strengthen confidence in the economic reform program in Ukraine. “The funds from this swap will be allocated towards gross international reserves replenishment,” said Valeria Gontareva, the head of the NBU.

The Riksbank has also concluded an agreement on what is known as “technical assistance” with Ukraine. This means that Riksbank will cooperate with the NBU to transfer knowledge and exchange experience within important central bank-related areas. The swap agreement with the NBU will extend for six months.

Alexander Paraschiy: The funds from the swap were not included in the IMF plan for external gap financing in 2015 (worth USD 16.3 bln, excluding debt operations), which means that they might push gross international reserves closer to USD 17 bln, when accounting for a USD 500 mln loan for gas from IFI’s and a USD 500 mln loan for a natural gas purchase from the EU. At the same time, the swap agreement’s six month expiration means that this boost in reserves will be quite artificial and temporary.