National Bank of Ukraine / Photo from UNIAN
Foreign reserves now cover 4.4 months of future imports – sufficient for Ukraine to meet its commitments, and for the government and the NBU to make their current transactions.
Ukraine's international reserves stood at USD 25.3718 billion (in the equivalent) as of June 1, 2020, according to early data reported by the National Bank of Ukraine.
In May, international reserves declined by 1.3%, but are close to where they started the year, the central bank reported.
The decrease in international reserves over the past month was primarily driven by the repayment of a significant part of this year's public debt.
The NBU also reported on drivers that determined how international reserves changed during the month.
Among them are government transactions to repay public debt. Ukraine paid a total USD 1,476.1 million (in the equivalent) to service and repay its public and publicly guaranteed forex debt. That includes $1,009.2 million in Eurobond repayments, $ 337.7 million in repayments on forex domestic government debt securities, and $60 million to repay the debt to the IMF. The remaining amount went to meet other commitments to international creditors. These international reserve outflows were partially offset by $418.8 million in new proceeds, including from the placement of $368.8 million of forex domestic government debt securities, the NBU said.
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Also, there were NBU’s transactions in the forex interbank market. The supply of foreign currency from businesses continued to surpass demand, enabling the NBU to buy back excess foreign currency and to replenish international reserves. In May, the NBU bought a total of $660.6 million and made no interventions to sell foreign currency.
Third, it's the revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations). These instruments gained an equivalent of $73.4 million in value last month.
Foreign reserves now cover 4.4 months of future imports – sufficient for Ukraine to meet its commitments, and for the government and the NBU to make their current transactions.