Ukraine's international reserves increased by 2.1% month-on-month to $20.633bn in March from February, the National Bank of Ukraine (NBU) reported on April 5.

The result was attributed to the receipt of €512mn in loan funds guaranteed by the World Bank; revenues from the placement of foreign currency bonds; the government received $357.1mn from the sale of Eurobonds and also $159.8mn and €5.4mn from the sale of foreign-currency denominated domestic government bonds; as well as favourable conditions in the FX market. The NBU’s net FX purchases in the interbank market increased the reserves by $162.2mn.

The regulator added that the supply of foreign currency exceeded demand in March, primarily due to the favourable external price conditions for Ukrainian exports, of agricultural and metallurgical products in particular, a stable inflow of export revenues, and non-resident investment in hryvnia government securities.

This enabled the NBU to purchase $271.7mn in the interbank FX market (including $90mn in FX interventions at the best price, $181.7mn at a unified rate) without influencing movements in the hryvnia exchange rate, which were shaped by fundamental factors. At the same time, the NBU sold $109.5mn in March to smooth out exchange rate fluctuations.

As of early April, international reserves covered 3.4 months of Ukraine’s imports and "were sufficient for Ukraine to meet its obligations and for the government and the NBU to conduct their current transactions", the regulator added.