Ukraine’s reserves rose to the highest in 11 years

Last month, the government’s foreign currency accounts at the National Bank received more than $5 billion.

In March, Ukraine’s international reserves increased by 10% and reached $31,878 million. This is a record volume over the past 11 years – since November 2011, the National Bank reported on Thursday, February 6.

Reserves are said to have increased last month on the back of outflows from international partners on the back of lower NBU net foreign exchange sales and moderate repayment of the country’s foreign currency debt.

Thus, $5,105.4 million was received in the government’s currency accounts at the National Bank. In this amount:

• $1,756.6 million from the Government of Canada;

• $1,617.1 million from the EU;

• $1,253.1 million from the United States (through the World Bank Trust Fund);

• $2.2 million from the International Development Association (IDA), part of the World Bank;

• $476.5 million – from the placement of foreign currency bonds of the domestic government loan (OVGZ).

At the same time, the government of Ukraine paid $486.8 million for the servicing and repayment of the state debt in foreign currency. In addition, Ukraine paid $638.6 million to the International Monetary Fund.

As for NBU operations, in March the regulator sold $1,668.9 million in the foreign exchange market, which was $783.1 million less than in February.

It is indicated that the volume of NBU interventions in the foreign exchange market is decreasing for the third month. Such dynamics in March were due to several factors: the seasonal factor, the limitation of non-productive capital flight (including due to the adjustment of gambling business activities) and the stabilization of exchange rate expectations.

“The latter was facilitated by the consistent monetary policy of the NBU, which aims to increase the attractiveness of hryvnia assets and refusal to directly finance the budget deficit in 2023,” the report said.

In addition, in March, due to revaluation, the value of financial instruments increased by $697.6 million.

Recall that in February, Ukraine’s reserves decreased for the first time in four months – to $28.8 billion, but remained above the level of the beginning of the year at $28.4 billion.

And in January, reserves grew by 5% and reached almost $30 billion.

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