Ukraine's foreign reserves declined by $37mn in February

Ukraine's foreign reserves declined by $37mn in February
Ukraine's foreign exchange reserves declined by $37mn to $18.410bn in February
By bne IntelliNews March 6, 2018

Ukraine's foreign exchange reserves declined by $37mn to $18.410bn in February, the National Bank of Ukraine (NBU) said in a statement on March 6.

The replenishment of the international reserves was attributed to the regulator's interventions in the foreign exchange market, where the NBU bought $397mn. "The inflow of non-resident capital, together with the increase in foreign exchange income of exporters, along with the favourable situation on the global markets, positively influenced supply of currency in the interbank market," the NBU's statement reads.

The reserves also obtained $137.4mn from the placement of government domestic loan bonds denominated in foreign currency.

At the same time, in February, $537mn was channelled with the aim of repaying and servicing state debt obligations, including $466mn for channelled to the International Monetary Fund (IMF).

The current level of Ukraine's FX reserves covers 3.5 months of future imports and is sufficient to meet the country's obligations and carry out the current operations of the government and the NBU, the central bank said.

The NBU expects to receive $3.5bn in financing from the country's main donor the IMF, $1.5bn proceeds from Eurobond placements and $500mn in financing from the World Bank in 2018, according to the regulator's November inflationary report.

Earlier, Ukraine and the IMF failed to agree a new price-setting formula for domestic gas tariffs, which is crucial for the continuation of existing funding from the $17.5bn bailout agreed with the IMF in 2015. The greenlighting of pension reform and creation of a specialised anti-corruption court are among other steps that are necessary for further IMF funding.