Ukraine gross reserves increase 2% in July

Ukraine’s gross international reserves increased by USD
0.59 bln, or 2.1%, to USD 28.95 bln in July, the National Bank of Ukraine (NBU)
reported on Aug. 5. The growth was prompted by receipts from the placement of
international Eurobonds, coupled with the NBU’s interventions at Ukraine’s
ForEx market.

In July, the foreign currency inflow to the
government’s accounts amounted to USD 666 mln (in the equivalent). In
particular, receipts from the additional issue of international
Eurobonds amounted to USD 526 mln and USD 140 mln from the
placement of local Eurobonds. At the same time, total government payments on
the redemption and servicing of state debt in foreign currency amounted to USD
417 mln, of which USD 369 mln was directed to the redemption and servicing of
local Eurobonds.

The net purchase of foreign currency by the NBU at the
ForEx market amounted to USD 188 mln in July.

The NBU also reported a USD 157 mln increase in the
value of its securities portfolio.

As of Aug. 1, Ukraine’s gross reserves amounted to 4.1
months of imports, the NBU said.

Evgeniya Akhtyrko: The growth
of Ukraine’s international reserves in July exceeded our expectations, as an
additional placement of international Eurobonds was quite a surprise. The improvement
of the situation at Ukraine’s Forex in the second half of the month prompted
the NBU to renew the purchase of the foreign currency.

The expected payment of around USD 2.7 bln from the
IMF in the form of an SDR allocation will result in a surge of Ukraine’s gross international reserves in
August. Meanwhile, the major foreign currency outlay is the repayment to the
IMF of around USD 205 mln. We expect Ukraine’s international reserves to increase
8-9% in August.