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5.2.3 Gross international reserves
As of 1 October 2021, Ukraine had $28,705.2mn in international reserves,
early data show. In September, international reserves fell by 9.2%, as Ukraine was past the peak of repayments on its external commitments.
Overall, the following drivers shaped the dynamics of international reserves in September:
1, transactions related to public debt management. The government spent a total of $2,557mn on the servicing and repayment of FX public debt. That included $2,521.1mn to service and repay Eurobonds and $2.1mn to service domestic government debt securities. The government received $216.9mn in FX inflows from the placement of domestic government debt securities.
2, revaluation of financial instruments (due to changes in their market value and exchange rate fluctuations). These instruments declined in value by $202mn last month.
3, the NBU’s transactions in the interbank FX market. For most of September, FX supply in the interbank FX market exceeded demand. This allowed the NBU to buy $146.6mn to replenish reserves. On one occasion, however, demand in the FX market surpassed supply, and the central bank sold $7mn to smooth out exchange rate fluctuations that were weakening the hryvnia.
Overall in September, the NBU made net FX purchases of $139.6mn in the interbank FX market.
International reserves now cover four months of future imports, sufficient for Ukraine to meet its commitments, and for the government and the NBU to make their current transactions.
Canada and Ukraine have agreed to start talks on expanding the 4-year-old Canada-Ukraine Free Trade Agreement to include services, financial services and telecommunications, Ukraine’s Economy Ministry reported after its officials met Tuesday with Larisa Galadza, Canada’s Ambassador to Ukraine. On Monday, President Zelenskiy met in Glasgow with Prime Minister Trudeau. Zelenskiylater tweeted: “The effect of the Free Trade Agreement was positively assessed. Simplification of trips to Canada for Ukrainian citizens was discussed.”
The NBU lowered the forecast of international reserves at the end of 2021 from $31.3 bln to $31.1 bln (NBU). According to the macroeconomic forecast of the regulator, the previously planned volume of international reserves for the end of 2021 was forecast to be $31.3 bln. In 2022, the forecast for international reserves was also reduced from $31.6 bln to $30.2 bln, and in 2023 - from $31.7 bln to $29.6 bln.
26 UKRAINE Country Report November 2021 www.intellinews.com