Ukraine's reserves down to $51.2 billion: NBU names reasons

Ukraine's international reserves decreased by 0.1% in July, standing at $51.1989 billion as of August 1. The decline was due to foreign exchange interventions by the National Bank and the state's payments on external obligations.

According to the NBU, spending in foreign currency in July only slightly exceeded inflows from international partners, foreign currency bond placements, and the conversion of funds received by Ukraine under the Ukraine Support Loan program.

The biggest impact on reserves came from the National Bank's operations on the foreign exchange market. In July, the NBU sold $4.7583 billion and bought $1.8 million. The net sale of foreign currency amounted to $4.7565 billion.

At the same time, the government's foreign currency accounts at the National Bank received $1.6406 billion. Of this amount, Ukraine got $683.3 million from the International Monetary Fund, $498.7 million through World Bank accounts, and another $458.6 million came from the placement of foreign-currency domestic government bonds.

In addition, Ukraine received $5.1 billion from the European Union as a defense tranche under the Ukraine Support Loan program. Due to its earmarked nature, these funds are not credited directly to international reserves. However, in July, the government converted $3.43 billion of this amount into hryvnia, which increased reserves by a corresponding volume.

For servicing and repayment of the state debt in foreign currency in July, $515.4 million was spent. The bulk – $433.3 million – went to foreign-currency domestic government bonds. Another $58.7 million Ukraine paid on obligations to the World Bank and $6.9 million to the European Union. Additionally, the state transferred $174.2 million to the IMF.

On the other hand, the revaluation of financial instruments due to changes in their market value and exchange rate increased reserves by $300.6 million.

Despite a minor decline in July, the NBU considers the current volume of international reserves sufficient to maintain the stability of the foreign exchange market. The reserves cover financing for 4.2 months of future imports.

Based on materials: National Bank of Ukraine