Ukraine gross foreign reserves surge 22% in August

Ukraine’s gross international reserves surged 21.6% m/m, or USD 2.2 bln, to USD 12.6 bln in August, the National Bank of Ukraine (NBU) reported on Sept. 4. An IMF wire (USD 1,650 mln), a World Bank loan (USD 508 mln) as well as the conversion of Chinese yuan into USD 403 mln were the key factors boosting gross international reserves. The NBU also continued purchasing foreign currency at the ForEx (USD 9.2 mln net). The main reserves spending stemmed from external debt servicing (USD 249 mln). 

Alexander Paraschiy: The August gross international reserves result was somewhat better than we expected, owing to the swap of Chinese yuan. Gross reserves should decline in September due to IMF loan payments amounting to nearly USD 180 mln. However further this year, we see reserves growing gradually due to extra wires from the IMF and other Western partners (up to USD 7.0 bln by the end of 2015), as well as a maturity extension on USD 4.1 bln in Eurobonds. Against this backdrop, we anticipate gross international reserves growing to USD 15.7 bln (3.9 months of imports) by the end of 2015.