- Ukraine’s international reserves decreased by 0.2% m/m in February 2018
The UX index increased by 1.3% yesterday and the PFTS index was up by 0.6% (in UAH terms). The WIG-Ukraine index decreased by 0.1%. On the interbank exchange market, the UAH/USD was down by 0.6% to UAH 26.44 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 26.54.
Ukraine’s international reserves decreased by 0.2% m/m in February 2018
According to the preliminary information provided by the National Bank of Ukraine (NBU), as of March 1, 2018, international reserves reached USD 18,410 mn, decreasing only by USD 33 mn (-0.2% m/m) during February. During February USD 537 mn were spent on the foreign currency debt’s servicing. Particularly, USD 466 mn were spent to make a payment to the International Monetary Fund (IMF), while another part of expenses was directed on a local debt servicing. Replenishment of reserves for USD 397 mn occurred due to the NBU’s activities on the interbank foreign currency market and for USD 137 mn as a result of the placement of local bonds denominated in foreign currency. As of March 1, 2018, the amount of international reserves covers 3.5 months of future imports and all current foreign obligations of the Central Bank and the Government.
Usage of the favorable situation in the interbank foreign currency market by the National Bank of Ukraine helped to cover almost all expenses caused by the scheduled payments to the IMF and other creditors. Despite the fact that during March NBU will be able to continue its reserves replenishment through the interbank foreign currency market, as the foreign currency supply is expected to grow after the key policy rate increase, but the net result of trading operation on the interbank market will not be high enough to cover at least USD 630 mn of foreign debt’s servicing expenses. That is why we expect foreign currency reserves to contract during March.