Ukraine gross reserves rise 1.3% in April

2018/5/7 16:50:22

Analyst: “April’s growth was in line with our projections and we expect they will drop again in May.”


KYIV, May 7, 2018 - Ukraine’s gross international reserves rose 1.3% m/m, or USD 229 mln, to return to February’s level of USD 18.4 bln, Concorde Capital informed its clients based of a National Bank of Ukraine (NBU) reported on May 5. Currency purchases on the ForEx, coupled with receipts from a local Eurobond placement, exceeded repayments on foreign currency-denominated state debt during the month.


During April, the NBU’s net currency purchases on the ForEx amounted to USD 302.7 mln following its 2Q18 plans for average daily currency purchases of USD 10 mln. Amid monthly appreciation of the national currency by 0.8%, the National Bank bought USD 146.0 mln via the interventions “at the best exchange rate," USD 80.0 mln via interventions “at a single exchange rate”, and USD 100.7 mln via currency auctions. At the same time, the NBU sold USD 24.0 mln via the intervention “at the best exchange rate”. The placement of local Eurobonds restocked reserves by EUR 83.6 mln.


At the same time, payments related to FCY-denominated state debt and servicing withdrew USD 127.4 mln from reserves during the month. In particular, local Eurobond servicing amounted to USD 30.8 mln.


The NBU also reported on a securities revaluation at USD 59.2 mln (adjustment to market value and currency exchange rate) and “other operations” at USD 11.3 mln, which apparently had an overall negative effect on reserves.


By the end of April, gross international reserves covered 3.3 months of future imports.


Concorde analyst Evgeniya Akhtyrko added: “April’s growth was in line with our projections and we expect they will drop again in May. FCY-denominated debt repayments are scheduled for this month at around USD 584 mln, including an IMF loan payment, a local Eurobond redemption and coupon payments. The only source of reserves replenishment will be the central bank’s currency purchases on the ForEx, which we estimate at USD 250-300 mln. That said, we expect gross reserves to drop 1.5% in May.




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