Ukrainian National Bank transfers $1 billion of currency reserves under the World Bank’s administration

The National Bank of Ukraine (NBU) has transferred up to $1 billion of the country’s gold and foreign currency reserves under the management of the World Bank, Interfax-Ukraine reported, citing a statement by the Central Bank’s deputy chairperson Oleg Churiy.

“Currently part of the gold and foreign currency reserves [of Ukraine] is managed by the World Bank,” the Central Bank’s official said, adding that the World Bank acts as “one of the largest investment managers for central banks,” and as such it manages the currency reserves of 53 countries.

According to Chuiry, among the reasons that prompted Ukraine to transfer the currency reserves to the World Bank are the ability to “perform operations with currency reserves similar to ones performed by the World Bank during its staff training,” as well as “access to the results of economic studies conducted by the World Bank,” and “an opportunity for the NBU’s personnel to study remotely at leading American higher education establishments.” Another benefit obtained by the Central Bank from transferring assets to the management of the World Bank was “receiving consulting services from the World Bank’s professionals.”

According to Churiy, the World Bank manages Ukraine’s currency reserves within the framework of the Central Bank, which includes highly liquid instruments, risk management, level of liquidity management, and reporting.

On January 5th, the NBU said in an official statement that the currency reserves of Ukraine over the last year grew by 21% to USD 18.808 billion as at January 1, 2018. At the same time, according to the Central Bank, by the end of 2017 the currency reserves were reduced by 0.5% due to payments on foreign debt. The dynamic was positively influenced by receiving a gain of  $588.8 million USD (including $586.4 million USD in proceeds from government bond placement). Ukraine’s expenses included $161.8 million paid to the International Monetary Fund and $423.6 million in repayment and servicing of the state foreign debt.

  NBU, World Bank, Economy of Ukraine