The dynamics are due to the National Bank of Ukraine's (NBU) foreign exchange interventions to cover the structural deficit of foreign currency in the market and smooth out exchange rate fluctuations, as well as the country's debt payments in foreign currency, according to the NBU.
These transactions were partially offset by proceeds from international partners and the placement of foreign currency domestic government bonds (T-bills).
In June, net foreign exchange sales amounted to $2.99 billion, 2.7% less than the previous month. The NBU sold $2.995 billion and bought back $0.9 million in reserves.
The reserves were also affected by revenues for the government and payments for servicing and repaying public debt. In June, $2.43 billion was transferred to the foreign currency accounts of the Cabinet of Ministers, while $444.5 million was allocated for servicing and repaying public debt.
Ukraine also paid $247.6 million to the International Monetary Fund (IMF). The revaluation of financial instruments positively impacted the reserves, adding $111.9 million.
"The current volume of international reserves provides financing for 4.9 months of future imports," the regulator said.
Earlier reports indicated that Ukraine's international reserves in August 2023 decreased by $1.3 billion, reaching $40.3 billion. In September 2023, reserves decreased by 1.7%, amounting to $39.7 billion as of Oct. 1.
In January 2024, the NBU lowered its forecast for international reserves at the end of 2024. On April 25, the NBU raised its reserve forecast for the end of this year to $43.4 billion from $40.4 billion and to $44.3 billion from $42.1 billion for the end of next year.
In May 2024, Ukraine's international reserves decreased by 7.9%, or $3.4 billion, to $39 billion. Following the fourth review of the EFF Extended Fund Facility program, the IMF slightly lowered its forecast of Ukraine's gross international reserves at the end of this year to $41.8 billion from $42.1 billion, while significantly improving its positive expectations for their level in the following years: from $41.6 billion to $43 billion in 2025 and from $45.1 billion to $48 billion in 2026.