REUTERS
Overall, the dynamics of international reserves in November were determined, in particular, by public debt repayments.
The National Bank of Ukraine (NBU) has said Ukraine's international reserves stood at US$26.1 million as of December 1, 2020.
In November, the reserves decreased by 0.02%, or US$4.7 million, as a result of redeeming external and domestic debt of the government and foreign exchange interventions conducted by the NBU to alleviate forex rate fluctuations in the currency market.
Overall, the dynamics of international reserves in November were determined, in particular, by government transactions to repay public debt.
"Foreign exchange earnings in favor of the government amounted to US$355.5 million, including US$345.5 million from the placement of domestic government bonds. At the same time, the total volume of payments for servicing and repaying public debt in foreign currency amounted to US$319.6 million. Of this amount, US$245.9 million was used to service and repay government bonds denominated in foreign currency, US$72.5 million to fulfill obligations to the IMF, and the rest of the funds was used to fulfill other government obligations in foreign currency," the NBU said.
What influenced international reserves
The NBU's interbank forex market transactions also influenced the dynamics of international reserves. In early November, demand on foreign currency on the interbank forex market exceeded the supply to due recovery of business activity, including resumption of imports. To smooth out exchange rate fluctuations that weakened the hryvnia, the NBU intervened several times by selling US$87 million. At the same time, on certain days, when the market experienced an excess supply of foreign currency, the National Bank bought US$41 million. The last three weeks of November, the foreign exchange market was balanced, so the NBU did not come out with interventions.
Also, the revaluation of financial instruments due to changes in their market value and exchange rate fluctuations took place. Last month, the value of these instruments increased by US$77.9 million.
"International reserves now cover 4.3 months of future imports, which is sufficient for Ukraine to meet its commitments, and for the government and the NBU to make their current transactions," the regulator added.