Ukraine spends USD 307 mln to support hryvnia in March

The National Bank of Ukraine (NBU) spent USD 307.5 mln to buy hryvnias on the ForEx market in March, according to NBU data released on April 11. Last week, the NBU reported a USD 16.9 mln gross foreign reserves increase to USD 24.73 bln in March.

Alexander Paraschiy: The NBU is generating confusing data about gross foreign reserves and its ForEx interventions. It reportedly spent USD 827.2 mln to buy hryvnias in 1Q13 while gross foreign reserves increased USD 183.8 mln the same period. That inconsistency makes us think that the NBU invented some additional channel of gross reserves replenishment on the top of traditional ForEx interventions. Otherwise, we would see a noticeable gross NBU reserves decline in the first quarter, instead of reported stability.

By the year’s end, we still expect the NBU to have allocated on hryvnia stability nearly USD 4.0 bln, which should pull gross reserves down to USD 20.7 bln.