Analyst: “In June, Ukraine will encounter difficulty with maintaining international reserves, given increased payments on FCY-denominated debt (around USD 166 mln to the IMF and USD 546 mln on a local Eurobond redemption and coupon payment).”
KYIV, June 7, 2018 - Ukraine’s gross international reserves declined 1.6% mm, or USD 302 mln, to USD 18.4 bln in May, the National Bank of Ukraine (NBU) reported on June 5. The losses were due to FCY-denominated debt repayments that exceeded receipts from a local Eurobond placement and net currency purchases by the central bank on the ForEx. In May, debt repayment to the IMF totaled USD 455 mln (in equivalent). Besides, USD 126 mln were channeled to the repayment and servicing of local Eurobonds while international Eurobond servicing demanded USD 18.5 mln. At the same time, the local Eurobond placement restocked reserves by USD 272 mln and EUR 65 mln. The net purchase of currency via the interventions “at the best exchange rate” during the month amounted to USD 181 mln and contributed to reserves replenishment. The NBU also reported on a securities revaluation of USD 162.3 mln (adjustment to market value and currency exchange rate), which apparently had a negative effect on reserves. Concorde analyst Evgeniya Akhtyrko added: “May’s drop in reserves was very close to our projection. A lesser-than-expected currency purchase on the ForEx was compensated by receipts from the local Eurobond placement. “In June, Ukraine will encounter difficulty with maintaining international reserves, given increased payments on FCY-denominated debt (around USD 166 mln to the IMF and USD 546 mln on a local Eurobond redemption and coupon payment). To avoid reserves losses, this outflow might be compensated by receipts from a local bond placement (around USD 500 mln) and a currency purchase on the ForEx (around USD 200 mln). Most probably, international reserves in June will be close to the level of the previous month. ### For more information, link here: www.concorde.ua
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