Page 33 - bne IntelliNews Country Report: Ukraine Dec17

5.2.3 Gross international reserves
Ukraine's foreign exchange reserves increased by $98mn, or 0.5% month-on-month to $18.736bn in September , the National Bank of Ukraine (NBU) said in a statement on November 7.
The result was attributed to the placement of local Eurobonds ($170.3mn) and swap operations (worth $100mn). At the same time, $147.2mn was spent on FX interventions, while $30.9mn was allocated on debt servicing needs.
In September, Ukraine placed $3bn in 15-year Eurobonds at 7.375% per annum, after Kyiv mandated JP Morgan, BNP Paribas and Goldman Sachs as bookrunners for its new Eurobonds issue. The deal has become a first market placement for the country since the victory of the popular uprising in February 2014.
The current level of Ukraine's forex reserves covers 3.7 months of future imports and is sufficient to meet the country's obligations and carry out the current operations of the government and the NBU, the central bank said.
The NBU expects to receive $3.5bn in financing from the country's main donor, the International Monetary Fund (IMF), $1.5bn proceeds from Eurobond placement and $500mn in financing from the World Bank in 2018, according to the regulator's November inflationary report.
Earlier, Ukraine and the IMF failed to agree a new price-setting formula for domestic gas tariffs, which is crucial for the continuation of existing funding from the $17.5bn bailout agreed with the IMF in 2015. The greenlighting of pension reform and creation of a specialised anti-corruption court are among other steps that are necessary for further IMF funding.
"The swaps and local Eurobonds prevented gross reserves from falling last month [October], but they will start falling actively this month," Alexander Paraschiy at Kyiv-based brokerage Concorde Capital wrote in a research note
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