Ukraine's international reserves are projected to increase from $41.2 billion at the end of July to $43.6 billion by the end of the current year, and then decrease to $41 billion next year (instead of the previously estimated $37.3 billion), according to the updated forecast released by the National Bank of Ukraine on Thursday.
"The NBU will be able to maintain an adequate level of international reserves to ensure the stability of the currency market. The projected volumes have been revised upward compared to July estimates – to $43.6 billion and $41 billion for the end of 2024 and 2025, respectively," said NBU Chairman Andriy Pyshny during a briefing on Thursday.
He added that considering the expected inflows, the NBU has improved its assumptions regarding external financial assistance for 2024-2026. It is anticipated that the total amount of international financing will reach $41.5 billion this year and $38.4 billion next year.
Pyshny believes that maintaining external support, along with a sufficient volume of domestic market borrowings, will allow the government to continue covering a significant budget deficit without resorting to emission financing.
To counteract price pressures, the NBU suspended the easing of monetary policy in July, which has supported interest in hryvnia savings, with rates currently providing adequate protection against inflationary depreciation. In particular, there has been a resurgence in the inflow of term deposits from the population in hryvnia this autumn, and further increases in investments in government bonds denominated in the national currency.
He added that the policy of protecting hryvnia savings from inflation will continue to help limit pressure on the currency market and maintain international reserves.
Additionally, the NBU has revised its expectations for the current account deficit, increasing it from $14.2 billion to $16.3 billion in 2024 and from $19 billion to $27.9 billion in 2025. The forecast for the 2026 figure has also worsened, from $23.5 billion to $28.4 billion.