Ukraine's gross international reserves (GIR) fell by 1.3% in July to a total of $17.748bn, according to preliminary estimates from the National Bank of Ukraine (NBU) the bank said on its website on August 7.

The fall was due to payments of public debt obligations, in particular a $321.5mn payment to service and repay foreign currency debt, of which $231.6mn was government domestic bonds denominated in foreign currency.

The NBU also spent some forex on interventions in the interbank foreign exchange market.

"Taking into account the excess of demand for currency over its supply for the second month in a row, the National Bank in July extended the sale of foreign currency in the interbank market to smooth out excessive fluctuations in the exchange rate," the report said cited by Interfax.

Net sales of currency for the past month amounted to $64.4mn. In the first half of July the NBU bought $99mn by intervening to choose the best price. Then, in the second half of the month, the central bank stepped up the sale of currency to prevent an excessive volatility of the exchange rate. As a result, by the end of the month, $163.3mn was sold, including $135.2mn through intervention by choice for the best price and $28.1mn at auctions, Interfax reports.

Since Ukraine’s IMF programme has been de facto suspended the government is entirely dependent on the domestic bond market for funds at the moment and has been actively issuing short-term foreign currency denominated bonds worth $130.9mn and €60.5mn.

Despite the small fall in GIR, the cash the NBU holds still covers three months of future imports that ensure the stability of the local currency.