Ukraine's int'l reserves down 1%, to $28.5 bln in Feb – NBU

Ukraine's international reserves stood at US$28.543 billion (in the equivalent) as of March 1, 2021, says the National Bank of Ukraine, citing preliminary data.

In February, reserves slid 1% due to the repayment of external and internal public debt, leveled in part through forex inflows to the government and the NBU interventions in the forex market.

The regulator explains that the international reserves were affected including by transactions related to managing public debt. 

"FX inflows to the government amounted to USD 456.7 million came from a placement of domestic government debt securities (T-bills and bonds). At the same time, the government spent and equivalent of USD 633.9 million (in the equivalent) on servicing and repayment of FX public debt. That includes the USD 489.2 million that went towards the servicing and repayment of T-bills&bonds, and the USD 33.7 million that was spent on the servicing of Eurobonds. The rest of the funds went to meet the government’s other FX commitments," the NBU report reads.

Furthermore, the government and the NBU in February repaid an equivalent of $213.1 million to the International Monetary Fund (IMF).

The NBU's interbank forex market transactions have also influenced foreign reserves, the regulator notes: "At the beginning of February, the FX supply exceeded demand on the account of nonresidents' increasing the T-bills and bonds portfolio. During this period, the NBU bought USD 200 million to replenish international reserves. In the last two weeks of February, the FX market was balanced, and so the central bank did not intervene. The central bank did not intervene to sell foreign currency in February."

Read alsoNBU updates inflation forecastAnother factor of influence was revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations). Last month, the NBU says, value of these instruments decreased by $87.5 million (in the equivalent).

International reserves now safely cover 4.6 months of future imports, sufficient for Ukraine to meet its commitments, and for the government and the NBU to pursue their current transactions.

Background

As of the end of 2020, Ukraine's international reserves increased by 15%, amounting to $29.1 billion in the equivalent as of January 1, 2021.