Ukraine’s international reserves fell by $2.5 billion, or 5%, to $48.7 billion in August, according to the National Bank. The regulator attributed the monthly decline to a reduction in international financial assistance, whilst foreign exchange interventions remained at a level close to that seen in July. The current level of reserves covers four months’ worth of future imports.
Briefly about the main points
- Gross reserves fell by $2.5 billion in August.
- Net international reserves stood at $33.8 billion.
- $927.3 million was credited to the government’s foreign currency accounts.
- The EU’s defence tranche was not credited to the NBU’s reserves.
- Current foreign exchange reserves are sufficient to cover four months’ worth of imports.
Net reserves were falling at a faster rate
Net international reserves fell by $2.5 billion, or 6.9%, in August to $33.8 billion. Gross and net reserves are different indicators, so The NBU publishes separately.
According to the regulator, foreign exchange interventions rose by just 0.5%, or $24.7 million, over the month — to $4.82 billion. This means that the NBU cited a lower volume of international inflows, rather than a significant increase in foreign exchange sales, as the key factor behind August’s trends.
The government’s revenue was accompanied by debt repayments
$927.3 million was credited to the government’s foreign currency accounts at the NBU. Of this amount, $894 million was credited via accounts World Bank, a further $33.3 million from other investors.
Separately, Ukraine received $1.63 billion from the European Union as part of the defence tranche of the Ukraine Support Loan programme. As the funds were earmarked for a specific purpose, they were not directly credited to the international reserves.
At the same time, the government allocated $721.8 million to service and repay the public debt denominated in foreign currency. The largest components were payments to the World Bank — $357.9 million — and servicing of government bonds amounting to $288.7 million. Ukraine also paid a further $258.2 million to the International Monetary Fund.
Revaluation of assets and changes to the portfolio structure
The revaluation of financial instruments in August added $752 million to the value of reserves. As at 1 September, the proportion of assets denominated in US dollars rose to 69.1% from 64.7% a month earlier, whilst the proportion of assets denominated in euros fell from 27% to 21.4%.
The proportion of gold in reserves rose from 7% to 8.3% over the month. A year ago, dollar-denominated assets stood at 66%, euro-denominated assets at 26.2%, and gold at 6.5%.
The NBU’s July forecast had predicted a higher level of reserves
In its July macroeconomic forecast, the NBU raised its estimate of international reserves at the end of 2026 to $69.7 billion from $64.8 billion. This is a forecast figure, distinct from the actual figure for August.
The regulator has raised its forecast for the end of 2027 to $73.7 billion from $66.5 billion, and for the end of 2028 to $70 billion from $61.1 billion.
