Ukraine seeks to return forex reserves to pre-crisis level

The National Bank of Ukraine (NBU) forecasted Monday that the country's foreign exchange reserves will reach 18 billion U.S. dollars at the end of 2015, around the same level in January 2014.

"Our foreign exchange reserves topped 12.6 billion dollars in August and we have ambitious plans to further boost them to 18 billion dollars by the end of the current year," NBU Governor Valeria Gontareva told a meeting of the Financial Stability Council.

The growth in the reserves will be driven by a comprehensive reform of the banking system and stabilization of the economy after a debt-restructuring deal with foreign creditors, which includes a write-down of 4 billion dollars of Ukraine's state debt, she said.

The central bank estimated that, within the next four years, Ukraine will nearly triple its foreign exchange reserves to a record high of 34 billion dollars, Gontareva added.

At the end of last year, Ukraine's foreign currency deposits shrank by almost two-thirds to 7.5 billion dollars, its lowest level since 2004, due to a financial crisis that has slowed the economy and weakened the local currency.

However, from January to August 2015, Ukraine's foreign reserves were up 39.1 percent mainly because the country has attracted two tranches of aid from the International Monetary Fund, totally worth 6.7 billion dollars. Endi