Ukraine's international reserves reach five-year high - NBU

"In 2018, Ukraine's international reserves grew by 10.6% and reached $20.8 billion as of January 1, 2019, according to tentative data. Such a volume of reserves not only exceeded the latest forecast of the National Bank ($19.2 billion, according to the inflation report for October 2018) but also reached a five-year high – such a level of reserves was last recorded in October 2013," reads the report.

The NBU said that international reserves had been increased primarily due to Ukraine obtaining external financing and the NBU purchasing excessive foreign currency in the interbank market.

Thus, during the greater part of the year, the supply of foreign currency in the interbank market surpassed the demand for it.

In addition, the supply of foreign currency from banks was affected by the net sale of foreign currency by the population. As a result, the NBU could make a net purchase of foreign currency worth $1.4 billion with no influence on the direction of the hryvnia exchange rate.

At the same time, proceeds from the International Monetary Fund, the European Union and the World Bank in support of macro-financial stability and reforms in Ukraine amounted to $2.4 billion. In addition, the government attracted $6.1 billion in foreign and domestic markets last year. At the same time, during the year, the funds from the reserves were directed mainly on government and NBU payments to service and repay public debt in foreign currency. Their total amounted to $8.1 billion.

The growth of reserves was also affected by an increase in the value of financial instruments (change in market value, the exchange rate of the hryvnia to foreign currencies) by $230 million.

In addition, the size of international reserves was influenced by an increase in the value of financial instruments (change in market value, the exchange rate of the hryvnia to foreign currencies) in the amount of $147 million.

In general, as of January 1, 2019, the amount of international reserves covers 3.5 months of future imports and is sufficient to meet Ukraine's commitments and carry out current operations of the government and the NBU. At the same time, an important factor in maintaining macro-financial stability in Ukraine is the extension of cooperation with the International Monetary Fund and a balanced monetary and fiscal policy.