For more than two weeks the Ukrainian media cast a bright spotlight on
a misunderstanding with IMF. Over the past several days more has been added
through the grapevine. Remembering that there is no smoke without fire,
The Day thought it best to ask Volodymyr Bondar, second-in-command at the
National Bank, for an official commentary.
It is true that a degree of misunderstanding has been registered lately
in Ukrainian-IMF relationships with regard to Ukraine's foreign exchange
reserves (was Mr. Bondar's opening remark). But first let me explain that
the notion of "foreign exchange reserves" is quite capacious, made up of
several components: gold (in the National Treasury and foreign bank vaults),
balance of account, and short- and long-term deposits. In addition, such
funds are often in what we call an investment portfolio. In other words,
we hand such funds over to a foreign bank for it to manage them and we
are paid interest. We also had some reserves (not much) in terms of securities,
not Ukrainian but foreign (German, American...). It is generally known
that most our foreign exchange reserves are formed at the expense of IFI
credits. The National Bank pays interest on these credits, so we must try
to make up for these expenses somehow.
And so, before receiving the first tranche under the IMF credit, I explained
certain aspects of the placement of foreign exchange reserves, primarily
with an AAA Swiss bank - and AAA means that this bank has own assets that
are considerably larger than all those possessed by the National Bank of
Ukraine. An amount of $200 million was given in two $100 million installments,
secured by external government bonds (popularly known as Gasprom bonds)."
Q: But we all heard about $200 million vanishing from a foreign bank
account. So what really happened?
A: If I have an amount in U.S. dollars in my clearing account,
no matter with what bank, this money originates form the United States,
because U.S. dollars are issued only by that country. All our reserves
- previously $2 billion and now a different amount - are placed with Western
banks, except the hard cash stored in the NBU basement vaults.
Q: You mean that no money has disappeared?
A: Precisely. That money is on deposit, confirmed by an accounting
report.
Q: What about the first $267 million IMF tranche we have received?
A: This tranche is still in SDR, not in dollars. Certain aspects
of its being used for monetary intervention remain open because certain
anticrisis clauses are still to be worked out. Incidentally, the IMF tranche
was followed by a World Bank one addressed to the Finance Ministry which
will be used to buy out bonds from the National Bank.
Q: And the currency corridor, will it be renewed?
A: We see no reasons for a strong devaluation of the hryvnia.
The Ukrainian GDP is twice as good as that of Russia and our trade balance
has improved somewhat. We have prevented the nonresident exodus from the
domestic market by restructuring about 78% of the debts. Of course, this
corridor serves as a stabilizing factor for all business entities. However,
the main thing is to have a good trade and payment balance, and inland
investment flow.







