As of 1 June 2023, Ukraine's international reserves were preliminarily estimated to be $37.3 billion. In May of this year, the reserves increased by 4%. A higher volume than the aforementioned was recorded in August 2011.
This is reported on the NBU's website.
"International reserves increased due to steady and rhythmic inflows from international partners, which exceeded the net foreign currency sales by the National Bank and the country's debt payments in foreign currency," the National Bank reports.
It is noted that a number of factors determined the dynamics of international reserves in May 2023. In particular, inflows in favour of the government and payments for servicing and repaying the public debt influenced the movement of reserves. Overall, $4.3 billion arrived into the government's currency accounts at the National Bank, including:
$1.6 billion constituted macro-financial assistance from the European Union;
$1.2 billion was provided by the USA (through the World Bank's trust fund);
$1 billion came from the placement of foreign currency government bonds;
$383 million was received from the World Bank.
As the regulator reports, at the same time, the government paid $842.2 million for servicing and repaying the public debt in foreign currency. Of this amount, $742.3 million were directed to the servicing and repayment of foreign currency government bonds, $30.1 million was paid to the World Bank, and the rest of the debt was sent to other international creditors. In addition, Ukraine paid $195.5 million to the IMF.
It is reported that in May, the NBU sold $1.96 billion worth of currency on the foreign exchange market and bought currency amounting to $63.3 million to increase reserves. The NBU's net foreign currency sales last month totalled $1.89 billion, which is the highest level since the beginning of the current year.
As the National Bank specifies, this was made possible due to the exhaustion of the seasonal factor, associated with the increased sale of currency by farmers for the sowing season. Also, difficulties with food exports to neighbouring countries and issues associated with the "grain corridor" affected the situation. "At the same time, inflows from international partners were noticeably larger than the volumes of NBU interventions with currency sales, which were carried out to cover the difference between demand and supply in the Ukrainian currency market," the regulator added.
Moreover, in May, due to revaluation, the value of financial instruments decreased by $26.8 million. From now on, the NBU specifies, the current international reserves cover the cost of imports for 4.9 months ahead.
Background. Earlier Mind reported that Ukraine's international reserves had grown by 10% in March, reaching $31.9 billion.