National Bank of Ukraine sells more than $430 mln from reserves from August 22 to 26

The National Bank of Ukraine (NBU) sold more than $437 mln from reserves in the period from August 22 to 26 and bought $7.3 mln, the Ekonomicheskaya Pravdapublication wrote on Friday referring to the data from the regulator, Qazet.az reports.

The publication notes that since the beginning of August, the NBU has been selling significantly more foreign currency from reserves than it acquires. In the first weeks of the month, the net sale of foreign currency was in the range of $400-500 mln, but last week the NBU, on the contrary, bought by $76.37 mln more than it sold.

The publication stresses that since the beginning of the year the regulator sold $16.6 bln and 1.8 bln euros, and acquired only $3.1 bln and 110 mln euros. By selling currency from reserves, the NBU, in particular, is trying to contain pressure on the foreign exchange market caused by the issuance of the hryvnia, as well as to balance the markets of exporters and importers to maintain a fixed hryvnia exchange rate, Ekonomicheskaya Pravda adds.

Earlier, the head of the NBU, Kirill Shevchenko, noted that Ukraine could face negative economic consequences from the operation of the printing press, with which the country's authorities are currently trying to cover the state budget deficit. According to him, the emission amounted to 20 bln hryvnias in March, 50 bln hryvnias in April, 50 bln hryvnias in May, and 105 bln hryvnias in June.

According to the Wall Street Journal, Ukraine's budget deficit due to military spending is about $5 billion a month, which makes it difficult for the country to fulfill its social obligations. In particular, conflict-related spending accounts for about 60% of the budget, while tax revenues cover only 40% of government spending. Ukraine's GDP for the year, according to preliminary estimates, will decrease by 30%. Kiev expects to close the resulting shortage at the expense of external assistance.