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butter (rising 65% year-on-year to $29.2mn). The export markets remained mostly the same, with Asia's share at 43.2%, the European Union (EU) at 30.4%, and Africa at 14.6%. The top five destination countries were India, Egypt, China, the Netherlands, and Spain. Agricultural trade turnover reached $11.3bn in January-June, increasing 3.5% y/y. The share of agricultural produce in external trade turnover was 23%. In 2017, the agricultural exports reached a record high of $18bn, the ministry noted. This year, the result is expected to be lower, given the less favourable price situation on the external markets. "As we reported earlier, unfavourable weather conditions resulted in lower winter crops this year. This factor, coupled with a worse price situation, is likely to result in lower export receipts from grain exports in 2018," Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital wrote in a note on August 21. "This loss might be partially compensated by boosted exports of vegetable oils and oilseeds, as their expected yields look quite promising at the moment." She added that Ukraine's key agricultural exports are restraining the growth of Ukraine’s trade deficit, which is a positive development. "The fast growth in exports of non-traditional agricultural produce reported by the ministry is also a positive development, which has resulted mostly from Ukraine’s free trade agreement with the EU," Akhtyrko added. "However, the impact of these products on Ukraine' overall exports is low."
5.2.2 Gross international reserves
Ukraine's gross international reserves (GIR) fell by 1.3% in July to a total of $17.748bn , according to preliminary estimates from the National Bank of Ukraine (NBU) the bank said on its website on August 7.
The fall was due to payments of public debt obligations, in particular, a $321.5mn payment to service and repaying foreign currency debt of which $231.6mn was government domestic loan bonds denominated in foreign currency.
The NBU also spent some forex on 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 cited by Interfax.
Net sales of currency for the past month amounted to $64.4mn. In the first half of July the NBU bought $99mn 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, $163.3mn was sold, including $135.2mn through intervention at the choice of the best price and $28.1mn at auctions, Interfax reports.
Since the IMF programme has been de facto suspended the government is entirely dependent on the domestic bond market for funds at the moment and has been actively issuing short-term foreign currency denominated bonds worth $130.9mn and EUR60.5mn.
Despite the small fall in GIR the cash the NBU holds still covers three months
29 UKRAINE Country Report September 2018 www.intellinews.com