Ukraine loses over $3 billion in reserves in one month without financial aid

Ukraine's international reserves decreased by 7.9% in May 2024 to $39 billion, according to the website of the National Bank. Such a sharp reduction is explained by the fact that there was practically no international financial assistance last month.

For the whole of May, only $20 million was received from the World Bank and another $123.1 million from the placement of foreign currency bonds to foreign currency accounts in the National Bank, while $412.3 million had to be paid for servicing and repaying the state debt in foreign currency. In addition, Ukraine paid another $240.8 million to the International Monetary Fund.

The net sale of currency by the central bank on the domestic market in May increased to $3.08 billion (36% more than in April).

In June, Ukraine should receive new tranches of financial aid from the International Monetary Fund and the European Union, so such a sharp reduction in reserves is temporary.

In March 2024, Ukraine's reserves increased to $43.8 billion, which became a new historical record. In April, they dropped to $42.4 billion.

The National Bank predicts that Ukraine's reserves will be at a high level in 2024-2025. From 2026, financial assistance from international partners will significantly decrease, as a result of which reserves will begin to decline (according to the current forecast – down to $39 billion by the end of 2026).