Page 37 - UKRRptApr20

Ukraine’s state and state-guaranteed debt stayed flat at $83.4bn at the end of February​, the Finance Ministry reported on March 26. State domestic debt rose 0.8% m/m to $33.2bn, while the state foreign debt declined 0.3% m/m to $40.5bn. State-guaranteed slid 1.4% m/m to $9.8bn. In UAH terms, overall state debt dropped 1.5% m/m to UAH2,048bn, making up 51.5% of Ukraine’s GDP in 2019. The February debt decline in UAH terms was mostly due to the hryvnia's appreciation in the last days of the month (UAH24.56/$as of February 29 vs. UAH24.92/$as of January 31).
7.0​ FX
Managing a gradual 13% devaluation of the hryvnia in March, the central bank sold $2.5bn and bought $264mn.​ In the first quarter, the National Bank of Ukraine sold twice as much foreign exchange as it bought -- $2.7bn versus $1.3bn. The rate on APril 1 was UAH27.7/USD.
Ukraine’s central bank was back in the exchange markets on March 18
spending $300mn to support the sinking hryvnia after the regulator spends almost $200mn on March 16 and just under $1bn the week before.
The hryvnia slid to UAH27.06 to the dollar on March 18 at the time of writing following panic buying of foreign exchange by Ukrainians, which fear another deep devaluation. Last week banks were starting to run short on physical dollars due to the demand, which the National Bank of Ukraine (NBU) blamed on travel restrictions.
The state-owned Privatbank, and the largest bank in the country, suspended the exchange the physical exchange of hryvnia for dollars on March 18, but said there was no restriction on exchange online and that customers could come to the bank to withdraw these dollars “by prior appointment.”
The country’s gross international reserves (GIR) increased to $26.6bn in January, having been boosted by Russia’s Gazprom concession to pay a $2.6bn fine awarded to Kyiv in a dispute over gas prices and deliveries. However, this amount is equivalent to only 3.7 months of import cover, when economists consider three months to be the minimum to ensure the stability of a currency. The NBU cannot afford to burn through a billion dollars a week to protect the value of the currency.
The hryvnia is expected to continues to weaken as the crisis caused by the coronavirus (COVID-19) pandemic is expected to escalate. Ukraine saw its first death from the virus at the end of last week and a second death was reported on March 18. So far only 114 cases had been reported as of March 17, but that number is expected to grow rapidly now.
Due to last fall’s strong hryvnia, Kyiv’s cost of living rose to tie Moscow’s,​ according to the latest Economist Intelligence Unit’s Worldwide Cost of Living Index. Based on 160 prices taken last fall in 133 cities, Kyiv climbed 22 places to tie with Moscow at 86th place. Since March 4, the ruble has lost 20% of its value against the dollar.
There was a panic in the exchange markets the week of March 9 that forced the National Bank of Ukraine (NBU) to selling almost $1bn​ to defend the hryvnia. Ukraine’s central bank started the next week selling
37​ UKRAINE Country Report​ April 2018 ​ ​www.intellinews.com