As of 1 July 2020, Ukraine’s international reserves stood at an equivalent of USD 28,515.73 million after increasing by 12.4% in June, according to preliminary data. The last time the country’s international reserves were at the same level was in late 2012. The significant increase in reserves last month was due to the receipt of the first tranche under the new IMF program and related financing, as well as the growth in FX purchases by the NBU in the interbank FX market.
Overall, the following drivers determined how international reserves changed during the month:
- first, international funding disbursements and government transactions to repay public debt. Ukraine received the first IMF tranche of SDR 1,500.0 million, or USD 2,076.4 million, under the new Stand-By program, and EUR 500 million in related official funding from the EU. In addition, the government placed EUR 353.3 million of FX-denominated domestic government debt securities. At the same time, the state spent an equivalent of USD 1,192.3 million on servicing and repaying FX-denominated public debt. That includes the USD 1,073.8 million that went to make repayments on FX-denominated domestic government debt securities, as well as USD 75.7 million in Eurobond repayments. The remaining funds were used to meet other commitments to foreign creditors.
- second, the NBU’s transactions in the FX interbank market. The supply of foreign currency by businesses continued to surpass demand. Taking advantage of this surplus, the NBU purchased excess foreign currency and replenished international reserves. Overall in June, the NBU bought a total USD 1,155.0 million, while making no interventions to sell foreign currency.
- third, the revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations). These instruments gained an equivalent of USD 154.0 million in value last month.
International reserves now cover 4.8 months of future imports – sufficient for Ukraine to meet its commitments, and for the government and the NBU to make their current transactions.
Data on international reserves and FX liquidity is compiled and published on a monthly basis:
- for preliminary data, no later than on the seventh day after the reporting month ends
- for revised data, no later than on the 21st day after the reporting month ends.
Revised data is available here.