Ukraine’s international reserves cut to $42.4B as of May 1

The relevant statement was made by the National Bank of Ukraine (NBU), an Ukrinform correspondent reports.

“As of May 1, 2024, according to the preliminary data, Ukraine’s international reserves came to $42,399.5 million. In April 2024, they reduced by 3.1%,” the report states.

According to the NBU, such dynamics was driven by the National Bank’s foreign exchange interventions to preserve the sustainability of the exchange rate and Ukraine’s foreign currency debt repayments, which were partially compensated by funding from international partners.

In April 2024, the dynamics of Ukraine’s international reserves was determined by a number of factors.

Firstly, the NBU’s transactions on the foreign exchange market of Ukraine. In April 2024, the NBU sold $2,295.4 million on the foreign exchange market and bought $30.9 million to replenish reserves. Therefore, the net sale of foreign currency by the NBU came to $2,264.5 million, having increased compared to March 2024. This resulted from the growing demand on the foreign exchange market, which was primarily driven by a pickup in government spending as regular inflows of external aid resumed from mid-March 2024.

Secondly, inflows into the Government’s accounts, as well as public debt servicing and repayment. In April 2024, the NBU foreign currency accounts of the Government of Ukraine received $1,649.7 million. In particular, a total of $1,603.1 million came as the second tranche of bridge financing from the EU under the Ukraine Facility; and $46.6 million – from the placement of foreign exchange domestic government debt securities.

A total of $884.5 million was transferred to service and repay the foreign exchange public debt, including $673.7 million to service and repay the debt to the European Union; $162.3 million to service and repay the debt to the World Bank; $6.5 million to service foreign exchange domestic government debt securities; $42.0 million to meet the country’s liabilities to other international creditors.

Additionally, Ukraine paid $92.6 million to the International Monetary Fund (IMF).

Thirdly, the revaluation of financial instruments due to changes in the market value and exchange rates. In April 2024, their cost increased by $224.3 million.

The current amount of Ukraine’s international reserves is enough to cover 5.5 months of future imports.

A reminder that, as of January 1, 2024, Ukraine’s international reserves reached $40.5 billion, having increased by 42% in 2023.

Photo: NBU