Ukraine's int'l reserves fell 1.9% to $38.97 bln in Oct

MOSCOW. Nov 7 (Interfax) - Ukraine's international reserves fell $735.2 million or 1.9% during October to $38.973 billion as of November 1, Ukrainian media quoted the National Bank of Ukraine as saying in a statement.

"These dynamics were driven by NBU interventions and Ukraine's FX debt repayments. At the same time, both factors were largely offset by inflows of assistance from international partners," the regulator said.

The NBU sold $3.35 billion on the currency market and bought $14 million to replenish international reserves. The NBU's net FX sales amounted to $3.338 billion, up from $2.691 billion in September.

"Increased interventions were primarily driven by a temporary rise in demand in the first days of the transition from the fixed exchange rate to managed exchange rate flexibility," the NBU said. Net sales in the first week of the transition came to $1.152 billion, but further on, interventions to sell foreign currency stabilized at the level observed before the transition to managed flexibility of the exchange rate.

The government's FX accounts with the NBU received $3.313 billion, including $1.59 billion of macro-financial assistance from the EU, $1.15 billion received as a grant from the United States through the World Bank's target fund and $572.7 million from the placement of FX domestic government debt securities.

The value of financial instruments increased by $247.2 million in October due to revaluation. Ukraine's government spent $892.5 million to service and repay FX public debt. That included $715.3 million to service and redeem FX domestic government debt securities and $135.8 million to service and repay the debt to the World Bank. Ukraine repaid $80.1 million to the International Monetary Fund.

"International reserves are now covering 5.2 months of future imports," the NBU said. They covered 5.3 months in September.

The NBU at the end of October raised its forecast for international reserves at the end of the year to $41.8 billion, from $38.3 billion in its July forecast.