The postponement of foreign debt payments and the increase in budget revenues support the hryvnia

Ukraine continues to resist Russian aggression thanks to the fierce resistance of the Armed Forces and the help of the entire civilized world, and is also trying to strengthen its economy.

Despite the growth of the official dollar rate to UAH 36.6/$ and the cash rate to UAH 39-40/$, there is hope for the exchange rate to stabilize in the near future thanks to the balanced policy of the government and the NBU.

Foreign creditors have agreed to freeze payments to Ukraine for international bonds in the amount of $20 billion, which is 75% of the amount of securities in circulation, for two years. This will save the budget $5.8 billion in interest. Creditors of Ukravtodor and Ukrenergo also agreed to postpone for two years payments on debts that were guaranteed by the state, and in the event of the issuers' inability to service them, they would transfer the obligations to the state.

The restoration of exports from the Black Sea ports of Ukraine by the end of the year can increase foreign exchange earnings by $8-10 billion, which will reduce the impact on the hryvnia exchange rate.

During August 1-5, the NBU sold $490.4 million from reserves and bought $7.5 million, while the week before last it sold $33 million and bought $682 million from reserves, which is the largest amount since November 2021. at the beginning of the year, the National Bank sold $15.5 billion and €1.8 billion, and purchased $2.8 billion and €110 million.

Revenues of the general fund of the budget of Ukraine in July reached UAH 169.6 billion, which is 74.3% or 72.3 billion UAH higher than in June and 124.3% or 94 billion UAH higher than in July 2021. Expenditures of the general fund in July amounted to UAH 182.5 billion or 94.9% of the budget schedule, while in June the schedule was fulfilled by 83.3%, and in May - 67.3%. In June, expenditures amounted to UAH 232.4 billion, and average monthly expenditures since the beginning of the war amounted to UAH 194.9 billion.

Thanks to the increase in revenues and reduction in expenses, the deficit of the general fund decreased to UAH 4.7 billion.

The following factors led to an increase in budget revenues in July:

• Completion of the deadline for the payment of taxes and fees for taxpayers who used the deferment in accordance with the changes to the Tax Code.
• Restoration of import taxation for goods imported by single tax payers and vehicles imported by citizens.
• Reduction of VAT refund volumes.
• Significant amounts of international aid, which in July amounted to UAH 80.4 billion or 47.7% of the revenues of the general fund, while in June the amount of grants amounted to only UAH 38.1 billion.

In general, in July, more non-refundable foreign aid was received to the budget than in the first half of 2022 (79.6 billion UAH). New tranches of aid to Ukraine announced by the world's leading countries will help stabilize the budget and continue the fight against the terrorist country.