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Shipping Logistics | International Logistics | International Freight Forwarder | Guangzhou Freight Forwarder | Panyu Freight Forwarder | Hongde International "Where does the money come from? Ukraine's gold and foreign exchange reserves exceed US $30 billion, a 11-year high"
Apr 17,2023
According to Russian media reports, on April 9, Ukrainian official Ustenko stated that Ukraine's gold and foreign exchange reserves exceeded US $30 billion, which is at a historical high level in the past 10 years. These funds should be enough to pay for Ukraine within five months. Import.
He said that these reserve assets are sufficient to meet the country's import expenditure for five months, while the foreign exchange reserves can meet the import demand for at least three months. "The country's financial system jiu is considered stable".
At the same time, Ukraine's budget deficit is expected to reach a record $38 billion in 2023.
Hongde Xiaobian doubts: then, why this debt-ridden country, gold foreign exchange reserves have hit a new high? Where did the money come from?
In 2022, Ukraine's international reserves decreased by 7.9 percent to a total of $28.5 billion billion as of January 1, 2023. The country's international (gold and foreign exchange) reserves rose 5 percent in January to nearly $30 billion, and fell again by 3.5 percent in February, to the amount of $28.86 billion on March 1, according to the monthly bulletin of Ukraine's national banks.
In March, the country's gold and foreign exchange reserves surged 10 percent to $31.9 billion, an 11-year high.
Russian economist Mikhail Belyaev explained that Ukraine's international reserve level remained stable or even increased because of the large amount of funds provided by the credit resources of Western countries such as Canada, the European Union, and the United States. Currently, Ukraine's gold and foreign exchange reserves are mainly made up of Western aid.
"Ukraine's financial system is completely dependent on Western aid, so it is absurd to assess its stability by the size of gold and foreign exchange reserves," said Larisa Scheisler, a former member of Ukraine's Nikolayev state council.
On the one hand, Western countries are injecting a lot of money into Ukraine in the form of loans, credit and free aid; on the other hand, the strengthening of Ukraine's hryvna exchange rate is conducive to Western investors buying domestic loan bonds with inflated interest rates. Under the condition of stable hryvna exchange rate, they can earn 10-15% of profits every year.
In other words, Western countries have injected large amounts of money into the Ukrainian financial system on the one hand, and "defrauded budget funds" from Western creditors on the other ".
She pointed out that Ukraine's international reserves from 2010 to 2013 were between $30 billion and $35 billion, and then began to decline. "Now the West resolutely takes up the job of safeguarding Ukraine's financial system to show its vitality." In addition, "financial aid to Ukraine is a way to control the ruling elite of this country."
Hongde Xiaobian learned from the report: Ukraine is not independent in terms of economy and finance. During the Russo-Ukrainian conflict, the country's external public debt surged by $2.3 billion to a record $132 billion.
In March this year, the International Monetary Fund (IMF) approved a four-year, $15.6 billion million loan program for Ukraine, the largest loan since the beginning of the Russia-Ukraine conflict. It is also the organization's shou approval to provide loans to the country's countries where the war took place.
The plan will be divided into two phases. In the second phase, which will last 12 to 18 months, Ukraine will take measures to "strengthen fiscal, external, price and financial stability". The second phase will shift to broader reforms to enhance macroeconomic stability and support the country's recovery and reconstruction, including taking into account the goal of Ukraine's accession to the European Union. In the meantime, the IMF said, Ukraine "is expected to return to the pre-war policy framework, including flexible exchange rate and inflation targeting mechanisms".
The IMF staff's forecast for Ukraine's economy this year is between 3 per cent contraction and 1 per cent growth, after a 30 per cent decline in 2022.
What about Russia's foreign exchange reserves?
On March 30, data released by the Central Bank of Russia showed that in the week ending March 24, Russia's international reserves reached 594.6 billion U.S. dollars, an increase of 8.8 billion U.S. dollars from the previous week.
Data show that in the week ending March 24, Russia's international reserves increased by 1.5.
Hongde's editor learned that Russia's international reserves include foreign exchange reserves, gold reserves, reserve positions in the International Monetary Fund and special drawing rights. Russia's international reserves are jointly controlled by the Russian government and the central bank and are mainly used to deal with economic risks.
In 2022, Russia's international reserves will decrease by 8.4. As of January 1, 2023, its size is $577.5 billion. Russia's international reserves peaked on February 18, 2022, at $643.2 billion. After the escalation of the crisis in Ukraine, Russia's international reserves showed a downward trend due to factors such as Western sanctions against Russia and the downturn of the Russian economy.
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