Ukraine gross foreign reserves increase 3.5% in June
7 July 2015
Ukraine’s gross international reserves increased 3.5%, or USD 346 mln, to USD 10.3 bln, the National Bank of Ukraine (NBU) reported on July 6. The main factors were positive interventions at the ForEx markets, a domestic state bond placement (USD 140 mln) as well as a conversion of USD 419.2 mln into Chinese yuan. At the same time, external redemptions (USD 275.6 mln to pay off bonds and USD 175.7 mln to the IMF) ate up a large part of the foreign currency inflow.
Alexander Paraschiy: June reserves were much better than expected. Since no IMF tranche was wired last month, we anticipated reserves shrinking to USD 9 bln. The outcome was different, certainly influenced by the currency swap with China. However, strengthened current accounts was a bigger factor.
In the upcoming months, we anticipate gross reserves to keep accumulating on the back of IMF support and inflows from other donors. A near-zero external trade balance also should help build up gross reserves. Still, we are not hasty to improve our gross international reserves forecast for the year. IMF support was delayed in June and very likely other payments (including the last one scheduled for December) will be shifted in similar fashion. We are keeping our initial forecast for the year unchanged at USD 11.5 bln (2.7 months of imports).
