Ukraine’s international reserves fell by 5% in August to $48.7 billion, while the National Bank sold $4.85 billion to stabilize the hryvnia exchange rate. Ukraine’s international reserves dropped by 5% over the month, standing at $48.662 billion at the beginning of September. The National Bank announced these figures and explained how such changes would impact the hryvnia exchange rate.
Throughout the month, the regulator actively sold foreign currency to offset market shortages and curb excessive exchange rate volatility. According to the NBU, $4.8507 billion was sold on the foreign exchange market in August, while only $0.5 million was purchased, resulting in net sales of $4.8502 billion.
Currency inflows and expenditures
At the same time, $927.3 million in international aid was deposited into the government’s foreign currency accounts at the National Bank in August. Of this amount, $894 million came via World Bank channels, and another $33.3 million from other sources. Reserves also increased by an additional $1.63 billion following the government’s conversion into hryvnia of funds previously received from the European Union as part of a defense tranche under the Ukraine Support Loan program.
Expenditures on servicing and repaying foreign-currency public debt totaled $721.8 million for the month. Specifically, 357.9 million went toward World Bank debt repayments, 288.7 million for servicing sovereign Eurobonds, 16.9 million for foreign-currency domestic government bonds, and another 58.3 million to other creditors. Separately, Ukraine transferred 285.2 million dollars to the International Monetary Fund.
Is the hryvnia at risk of a sharp drop?
The National Bank emphasizes that a reduction in reserves does not in itself mean the hryvnia will sharply lose value in the near future. As of early September, accumulated funds are sufficient to cover approximately four months of future imports, meaning the foreign currency buffer remains adequate. Going forward, the exchange rate will be determined by four factors: the volume of international aid, demand for foreign currency, the NBU’s need for market interventions, and future sovereign debt repayments. The regulator warns that if interventions remain high while aid decreases, pressure on reserves will intensify.
A 2,000-hryvnia banknote does not mean “printing” money
Separately, National Bank Governor Andriy Pyshnyi previously explained that introducing a new 2,000-hryvnia banknote into circulation does not mean increasing the money supply in the economy. The new bill merely replaces a portion of existing cash and does not signal a return to the economic realities of the 1990s.
