Ukraine’s international reserves up 6.9% to record high USD 41.7 billion in July
As of August 1, 2023, Ukraine's international reserves amounted to USD 41,718.6 million, according to preliminary data.
This is stated in the NBU message, Ukrainian News Agency reports.
In July, they grew by 6.9%, reaching a new record high for the second consecutive time since Ukraine gained its independence.
Prior to this, the maximum level of reserves was recorded on July 1, 2023 - USD 39,026.5 billion.
In July, international reserves continued to grow due to sustained and regular inflows from international partners, which exceeded the NBU’s net FX sales and Ukraine’s FX debt repayments.
Overall, during the past month, a number of factors determined the dynamics of international reserves.
The first factor was inflows to the government’s accounts and the servicing and repayment of public debt.
The government's FX accounts at the National Bank received USD 4,681.3 million.
Of this amount:
- USD 1,657.4 million - macro-financial assistance from the EU;
- USD 1,496.3 million - concessional loan guaranteed by the government of Japan through the World Bank’s Target Fund;
- USD 1,300.3 million - grant funds through the World Bank’s trust fund, of which USD 1,250.0 million from the United States;
- USD 227.3 million - from the placement of FX domestic government debt securities (OVDPs).
For servicing and repayment of the FX public debt, the Government of Ukraine paid USD 394.6 million, of which: USD 319.6 million - for servicing and repayment of the FX domestic government debt securities, USD 66.8 million - debt to the World Bank, the rest - debt to other international creditors.
The second factor was the operations of the National Bank in the FX market of Ukraine.
In July 2023, the National Bank (according to the balance sheet data) sold USD 1,873.4 million in the FX market and bought back USD 12.9 million to reserves.
So, the net currency sale by the NBU last month was USD 1,860.5 million.
Inflows from international partners remained significantly higher than the NBU's currency sales interventions, which were carried out to cover the difference between demand and supply in the FX market of Ukraine.
The third factor was the revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations).
In July, as a result of the revaluation, the value of financial instruments increased by USD 266.0 million.
The current volume of international reserves provides funding for 5.6 months of future imports.
As Ukrainian News Agency earlier reported, in 2022, the international reserves declined 7.9% to USD 28.5 billion.
In 2021, international reserves rose 6% to USD 30.941 billion.
In 2022, the surplus of the current account of balance of payments amounted to USD 8.6 billion (5.8% of GDP), compared to a deficit of USD 3.9 billion (1.9% of GDP) in 2021.