Ukraine's international reserves decline 2.9% to nearly $38 bln in June

MOSCOW. July 5 (Interfax) - Ukraine's international reserves declined 2.9% to $37.9 billion in June, Ukrainian media reported, citing a post from the National Bank of Ukraine (NBU) on its Telegram channel.

"This dynamic resulted from NBU forex interventions to cover the structural currency deficit on the market and smooth out exchange rate fluctuations, as well as from the country's debt payments in foreign currency," the bank said.

The NBU also said that revenues from international partners and from placing foreign currency domestic government loan bonds partially offset the operations.

The NBU said that net sales of currency totaled around $2.99 billion in June, a decline of 2.7% month-on-month, with the NBU selling $2.996 billion on the forex market and purchasing $0.9 million for reserves.

Moreover, government receipts and payments for servicing and repayment of the government debt affected the current volume of reserves. As noted, $2.43 billion were transferred to the foreign currency accounts of the Cabinet of Ministers in June, while $444.5 million was allocated to service and repay the government debt. Ukraine also paid $247.6 million to the International Monetary Fund.

The revaluation of financial instruments positively affected the volume of reserves, adding $111.9 million.

"The current volume of international reserves provides financing for 4.9 months of future imports," the regulator said.

As reported, Ukraine's international reserves decreased 7.9% to $39 billion in May. The NBU in April raised its forecast to $43.4 billion for reserves at the end of the year from $40.4 billion, and to $44.3 billion from $42.1 billion, respectively, at the end of next year.

Following the fourth review of the Extended Fund Facility (EFF) Arrangement, the IMF lowered its forecast slightly for Ukraine's gross international reserves to $41.8 billion at the end of the year from $42.1 billion. The IMF improved its forecast for Ukraine's gross international reserves from $41.6 billion to $43 billion in 2025 and from $45.1 billion to $48 billion in 2026.