Ukraine reserves jump 8.5% m/m on Russian loan
13 January 2014
Ukraine’s gross international reserves rose USD 1.6 bln to USD 20.4 bln (2.4 months of future imports) in December, according to National Bank of Ukraine (NBU) data released on Jan. 11.
Alexander Paraschiy: The first tranche of a Russian loan (USD 3.0 bln), which was arranged as Eurobonds placement on Dec. 20, stands behind the gross reserves increase. Another contributor was an active USD-denominated state bonds placement (USD 806 mln), which was also fueled by promised financial support from Russia. If not for the Russian support, gross foreign reserves would have fallen below USD 17 bln by Jan. 1, a very unhealthy level.
In light of more Russian loans expected this year (USD 12 bln) and gas prices discounted to USD 268 per tcm, we project an improved C/A deficit (down to USD 12.2 bln from USD 15.3 bln in 2013) and bolstered gross foreign reserves (up to USD 22.4 bln) by the end of 2014.
