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Ukraine continues to spend reserves in war conditions
According to the results of July, the National Bank sold 2,117 million dollars on the foreign exchange market and bought back 922 million dollars in reserves.
The amount of international reserves of Ukraine during July 2022 decreased by 416 million dollars – by 2% – to 22,385 million dollars. About this reported press service of the National Bank.
Compared to June ($2,300 million) the rate of reduction of reserves has slowed down more than five times. At the same time, since the beginning of the year, Ukraine’s reserves have fallen by 27.7% or $8,555 million.
As noted by the regulator, the NBU’s interventions and payments on the state’s domestic currency obligations were largely offset by currency loans in favor of the government.
The NBU sold $2,117 million on the foreign exchange market and bought back $922 million in reserves. The balance of NBU interventions at the end of the month was negative and amounted to $1,195 million.
“The decrease in the net sale of currency by the National Bank in July, if compared with previous months, is primarily due to the adjustment of the official exchange rate of the hryvnia to the dollar from 9:00 a.m. on July 21, 2022 by 25% (to the level of 36.57 hryvnias for 1 dollar)” , the message says.
After the establishment of the new official exchange rate of the hryvnia to the US dollar, the net demand for non-cash transactions by customers decreased significantly. Thus, from July 22 until the end of the month, a net supply of $40 million to $70 million per day was recorded daily on the interbank foreign exchange market.
“The decrease in the volume of issue financing to UAH 30 billion in July (from UAH 105.0 billion in June) also contributed to reducing the pressure on international reserves,” the NBU noted.
Foreign currency inflows to the accounts of the Government of Ukraine at the National Bank in July amounted to 1,563.2 million dollars. In particular, $1,049.1 million came from the German government, and $514 million came from the placement of domestic currency government bonds (OVDP).
The total volume of payments by the government for servicing and repaying the state debt in foreign currency amounted to 677 million dollars, including 630 million dollars for servicing and repayment of OVDP bonds, and 47 million dollars for settlements with other creditors.
In addition, reserves were affected by the revaluation of financial instruments due to changes in market value and exchange rates. Last month, their value decreased by $107.9 million.
Earlier, the National Bank announced when gold and foreign exchange reserves will return to pre-war levels. As you know, at the beginning of 2022, Ukraine’s reserves amounted to $30,941 million.
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