Ukraine's forex reserves 1.3% down in July – NBU
Ukraine's international reserves in July 2018 decreased by 1.3% and as of August 1 were $17.748 billion, according to preliminary data posted on the website of the National Bank of Ukraine (NBU).
According to the central bank, the reduction in forex reserves, as in June, is due to the implementation of payments on public debt. In particular, $321.5 million was spent on servicing and repaying the national debt in foreign currency, of which $231.6 million on government domestic loan bonds denominated in foreign currency.
The volume of reserves was also influenced by NBU interventions in the interbank foreign exchange market.
"Taking into account the excess of demand for currency over its supply for the second month in a row, the National Bank in July extended the sale of foreign currency in the interbank market to smooth out excessive fluctuations in the exchange rate," the report said.
Net sales of currency for the past month amounted to $64.4 million. In particular, in the first half of July the NBU bought $99 million by intervening to choose the best price. Then, in the second half of the month, the central bank stepped up the sale of currency to prevent an excessive volatility of the exchange rate. As a result, by the end of the month, $163.3 million was sold, including $135.2 million through intervention at the choice of the best price and $28.1 million at auctions.
The main source of replenishment of reserves in July was the government's proceeds from the placement of government domestic loan bonds denominated in foreign currency in the amount of $130.9 million and EUR60.5 million.
In addition, the amount of reserves was affected by the revaluation of financial instruments in the amount of $45.9 million.
In general, as of August 1, 2018 the volume of international reserves covers three months of future imports and is sufficient to fulfill Ukraine's obligations and the current operations of the government and the NBU.