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International Reserves Kept Growing in December but Were Still Lower than at the Start of 2022

International Reserves Kept Growing in December but Were Still Lower than at the Start of 2022

Ukraine had USD 28.5 billion (USD 28,491.0 million) in international reserves as of 1 January 2023, preliminary data show. In December, international reserves grew by 1.9% compared to November 2022 thanks to FX inflows from international partners, which exceeded the NBU’s FX sales to sustain the fixed exchange rate.

In general, several factors determined the dynamics of international reserves in December 2022:

First, inflows to the government’s accounts and spending on servicing and repaying the public debt.

FX inflows to the government’s accounts with the NBU amounted to USD 4,468.4 million. This included:

  • USD 2,030.3 million from the United States (through the World Bank’s trust fund)
  • USD 598.7 million from the EU
  • USD 540.7 million from offering FX domestic government debt securities
  • USD 402.0 million from the World Bank
  • USD 367.8 million from the Canadian government
  • USD 528.9 million from other international creditors.

The government of Ukraine spent a total of USD 833.9 million on servicing and repaying the FX public debt. In particular, USD 714.3 million was allocated to service and redeem FX domestic government debt securities, and another USD 119.6 million was spent for repaying debt to other international creditors. In addition, Ukraine repaid USD 166.2 million to the International Monetary Fund.

Second, the NBU’s interbank FX market transactions.

Last month, the NBU sold USD 3,193.1 million on the FX market and bought USD 29.6 million to replenish international reserves. As a result, the NBU increased its net FX sales to USD 3,163.5 million in December.

The last month’s increase in the central bank’s FX sales was primarily due to the seasonal factor of higher budgetary spending at the end of the year. The FX market was also influenced by businesses’ and households’ high demand for imports of backup power devices and increased imports of fuel to run these devices amid power supply shortages caused by russia’s terrorist attacks on the critical infrastructure of Ukraine.

Third, the revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations).

In December, the value of financial instruments increased by USD 231.6 million due to revaluation.

In 2022, Ukraine’s international reserves decreased by 7.9%.

Last year, Ukraine received an unprecedented international financial assistance of USD 32.1 billion according to the balance sheet data. The largest amounts of financial assistance came from the United States (USD 12 billion), the European Union (USD 8 billion), the International Monetary Fund (USD 2.7 billion), Canada (USD 1.9 billion), and Germany (USD 1.6 billion).

Furthermore, in 2022, Ukraine received about USD 3.1 billion from placement of FX domestic government debt securities.

Together with the international assistance, this helped set off a large portion of the NBU’s net FX sales (USD 25 billion) and payments on servicing and repaying Ukraine’s FX public debt (USD 9.1 billion).

In 2022, the NBU was a net FX seller on the market. Until 23 February 2022, the NBU had been selling FX to alleviate excessive FX rate fluctuations considering the rising geopolitical tensions. From 24 February, the NBU has been conducting FX sale interventions in order to sustain the fixed official exchange rate of the hryvnia, which remains the anchor for the economy and which helped keep inflation under control.

International reserves are now covering 3.6 months of future imports.

Data on international reserves and FX liquidity are compiled and published on a monthly basis:  

  • for preliminary data, no later than on the 7th day after the reporting month ends
  • for revised data, no later than on the 21st day after the reporting month ends.

Revised data are available here.

For reference

Data on Ukraine’s international reserves, public debt management, and revaluation of financial instruments are presented in the U.S. dollar equivalent.


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