Ukraine's balance of payments somewhat worsening - NBU deputy governor
KYIV. May 18 (Interfax-Ukraine) - The balance of payment situation in Ukraine somewhat worsened in April compared to March due to a reduction of official foreign financing and growing imports, National Bank of Ukraine (NBU) Deputy Governor Serhiy Nikolaichuk said.
"It's true that the balance of payments situation somewhat worsened in April. Our forex interventions on the market increased from $1.7 billion in March to $2.2 billion in April," he said.
On the other hand, forex proceeds in favor of the government declined from $3.3 billion in March to under $2 billion in April, mainly due to a reduction in official foreign financing, he said.
"Hence, after the international reserves grew by $600 million in March, they went down by $1.2 billion in April," Nikolaichuk said.
Listing the factors affecting the balance of payments, Nikolaichuk mentioned growing spending on fuel and defense needs, as well as a significant volume of settlements with payment systems, primarily due to the active use of hryvnia-denominated bank cards abroad by refugees from Ukraine.
"I don't think we'll see the situation worsen dramatically. From what we're seeing now, the interventions in May are consistent with April's trends. Generally speaking, it seems to me we're having some local equilibrium now," he said.
A lot will depend on how the situation develops, how quickly Ukraine can build alternative export routes, and how successful it is in having its seaports unblocked, he said.
"International support will also be important. We've seen quite substantial progress on that over the past few weeks, which includes financing promised to us by the World Bank, the EU, and the U.S.," Nikolaichuk said.
Once endorsed by the U.S. Congress, a new $40-billion aid package for Ukraine should significantly strengthen Ukraine's balance of payments, he said.
"We're working actively to make sure that our expenditures on the forex market to maintain the exchange rate's stability (and we expect them to be smaller in the second part of the year) are fully covered by official foreign financing," Nikolaichuk said.
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