Ukraine’s foreign exchange reserves reduced to $22.4 billion as of August 1

As of August 1, 2022, Ukraine’s foreign exchange reserves amounted to $22.385 billion.

The relevant statement was made by the National Bank of Ukraine (NBU), reports a correspondent of Ukrinform.

In July 2022, Ukraine’s foreign exchange reserves decreased by 2% due to National Bank interventions and payments on domestic foreign exchange obligations of the state, which were mainly offset by foreign currency borrowing in favor of the government.

In general, last month, the dynamics of foreign exchange reserves were determined by a number of factors, namely the transactions of the NBU on the interbank foreign exchange market.

In the foreign exchange market, the NBU sold $2,117.0 million and bought $922.0 million to replenish its reserves. At the end of July, the balance of interventions implemented by the NBU was negative, totaling 1,195.0 million dollars. The decrease in the net sale of foreign currency is mainly the result of the official exchange rate of the Ukrainian hryvnia against the US dollar adjusted by 25% since July 21, 2022 (at 36.51 UAH for the US dollar).

When the new official exchange rate was established, the net demand for individual cashless transactions decreased significantly. From July 22 until the end of the month, a net supply of 40 to 70 million dollars was recorded daily on the interbank foreign exchange market.

The reduction in monetary financing to UAH 30.0 billion in July (from UAH 105.0 billion in June) also contributed to reducing pressure on foreign exchange reserves.

In addition, foreign exchange reserves were affected by public debt service operations and aid from international partners.

In July 2022, foreign currency inflows to Ukrainian government NBU accounts amounted to $1,563.2 million. In particular, a total of 1,049.1 million dollars was received from the German government, and 514.0 million dollars – from the placement of domestic government bonds in foreign currency.

At the same time, the total amount of public debt service payments in foreign currency reached $677.0 million. A total of $630.0 million was transferred to service and repayment of domestic government bonds, and $47.1 million – to settle accounts with other creditors.

In addition, the dynamics of foreign exchange reserves were affected by the revaluation of financial instruments due to changes in market value and exchange rates. Last month, their cost fell by $107.9 million.

Currently, Ukraine’s international reserves cover 3.5 months of future imports, which is enough to meet Ukraine’s obligations and ongoing transactions of the Ukrainian government and the NBU.

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