Preliminary data suggests that as of 1 December 2016, Ukraine's international reserves amounted to the equivalent of USD 15.271 billion. International reserves have declined by 1.6% on the month due to heightened political tensions, the need to make public debt service payments, and the revaluation of reserve assets. Overall, international reserves have expanded by 16% over the past 12 months.
In October, international reserves increased due to:
First, the NBU’s foreign exchange interventions conducted in the interbank FX market. In November, the FX market continued to benefit from favorable external factors, such as high foreign exchange proceeds from grain exports. However, their impact was partially offset by heightened political tensions, which have triggered jitters in the FX market. As a result, the excess supply of foreign currency in the interbank market was limited during the month, enabling the NBU to hold only 6 FX purchase auctions through which a total of USD 113.6 million was purchased by the regulator to replenish international reserves. Also, when Ukraine was faced with a bout of political instability, the NBU had to hold a FX sale auction through which a total of USD 33.6 million was sold to smooth excessive exchange rate volatility. In November, the NBU’s net FX purchases amounted to USD 80 million.
Second, USD 59.6 million in proceeds was received by the Government from the European Commission.
However, the increase in reserves was offset by other factors that caused international reserves to shrink.
The key factor behind the reduction in international reserves was a downward revaluation of reserve assets due to the strengthening of the US dollar against other currencies and a slump in gold prices during the month.
In addition, the Government’s payments related to the repayment and servicing of the public and publicly guaranteed debt denominated in foreign exchange in the amount of USD 147.2 million, including principal and interest payments of USD 94.0 million on Eurobonds, were financed from international reserves.
Currently, the amount of Ukraine’s international reserves is sufficient to cover 3.6 months of future imports and enable the Government and the NBU to settle their foreign debt obligations and current operations.
For reference
Data on international reserves and foreign currency liquidity are compiled and disseminated on a monthly basis:
- not later than the seventh day following the reporting month – preliminary data;
- not later than the twenty-first day following the reporting month – revised data;