NBU: Ukraine’s International Reserves Reach Seven-Year High
The reserves are $2.3 billion higher than NBU projections
Photo from Ukrinform – UATV
As of January 1, 2020, Ukraine’s international reserves reached $25.3 billion, which has not been observed since December 2012, according to the press service of the National Bank of Ukraine (NBU), reports Ukrinfom.
“In 2019, Ukraine’s international reserves grew by 22% and made up $25.3 billion (in equivalent) as of January 1, 2020. The amount of reserves not only exceeded the National Bank’s latest forecast ($23 billion in equivalent, according to the October 2019 Inflation Report) but reached a seven-year high — the highest figure since December 2012,” reads the report.
The National Bank notes that international reserves grew by $4.5 billion over the year due to a favorable situation in the foreign exchange market, which was driven by accelerated economic growth and a steady inflow of foreign capital into the country.
During the year, the supply of foreign currency in the interbank market significantly outstripped demand. The high level of supply was provided by Ukrainian exporting companies, first of all, in the agrarian sector, as well as foreign investors who sold $4.3 billion to purchase hryvnia government bonds.
At the same time, according to the NBU estimates, importers’ demand for foreign currency last year was moderate, in particular, due to lower world energy prices. The volumes of repatriation of business dividends abroad were also smaller.
“At the year-end, the net purchase of foreign currency by the National Bank reached $7.9 billion, which is the highest in the last 14 years,” the NBU stated.