Ukraine’s foreign exchange reserves rose to $31.9 billion in early April, the highest figure in 11 years, thanks to foreign aid, lower demand for foreign currency and moderate payments on public debt, the National Bank of Ukraine, Reuters and Agerpres reported on Thursday. .
Ukraine has faced the specter of an unprecedented budget deficit this year due to the heavy military spending needed to counter the Russian invasion, and relies heavily on financial aid from abroad to be able to fund government and humanitarian needs.
The National Bank of Ukraine reported that it received a total of $5.1 billion from Ukraine’s international partners, including funds from the United States, the European Union, and Canada.
“This is the highest level in the last 11 years. The last time the reserves were at this level was in November 2011,” the NBU said in a statement published on its website.
In March, the Kyiv government paid 486.8 million dollars to service the foreign debt. The amount included $409.3 million for interest payments on government bonds denominated in foreign currency, the NBU reported. Ukraine also paid 638.6 million dollars to the International Monetary Fund.
At the same time, the National Bank of Ukraine stated that in March the demand for currency on the foreign exchange market was lower.
Since the summer of last year, the official rate of the Ukrainian hryvnia has been fixed at 36.57 hryvnias per dollar. The central bank often intervenes in the market to support the hryvnia exchange rate and reduce the gap between the official and market exchange rates.
In March, market interventions of the National Bank of Ukraine decreased for the third month in a row. “Dynamics in March are due to several factors: seasonality, restriction of outflow of non-productive capital and stabilization of expectations regarding the exchange rate,” the institution stated.
The current level of foreign exchange reserves is sufficient to cover future imports for 4.2 months, the National Bank of Ukraine estimated. For comparison, at the beginning of March, foreign exchange reserves of Ukraine amounted to 28.9 billion dollars.
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Source: Hot News
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