Ukraine’s international reserves grew by 5% in January: reasons

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As of February 1, Ukraine’s international reserves amounted to $29.92 billion, indicating a 5% increase in January, primarily due to international assistance.

About it informed press service of the National Bank.

In January, the dynamics of international reserves was influenced primarily by receipts in favor of the government and payments for servicing and repaying the public debt.

In particular, the government’s foreign currency accounts with the NBU received $43 billion: $3.3 billion from the EU, $1 billion from the US, $71.6 million from the sale of foreign currency government bonds). Receipts from international partners offset the net sale of foreign currency by the National Bank to cover the difference between supply and demand in the foreign exchange market.

On the other hand, the government paid $65 million for servicing and paying off the state debt in foreign currency ($59.0 million to the World Bank, $5 million – payments on foreign currency government bonds, the rest – debt to other international creditors).

The operations of the National Bank in the foreign exchange market also had an impact. In January, the regulator sold $3.1 billion from reserves and bought $28.5 million into reserves. So, the net sale of foreign currency decreased by about $100 million compared to December 2022 to $3.1 billion.

Such a volume of interventions, which slightly decreased relative to December, is due on the demand side to the impact of significant budget spending at the end of 2022, and on the supply side – a combination of the seasonal factor (a decrease in export earnings at the beginning of the year) and the consequences of a full-scale war on the economic activity of exporters.

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In addition, the change in the volume of reserves was affected by the revaluation of financial instruments due to changes in the market value and exchange rates. Thus, in January, due to revaluation, the value of financial instruments increased by $225.7 million.

Current international reserves finance 3.7 months of future imports

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