Hold-ups in Ukraine’s $17.5bn bailout have left the central bank treading a lonely path to rebuild the nation’s financial defences. While foreign reserves are creeping up, the former Soviet republic isn’t out of the woods yet.
Ukraine sealed an International Monetary Fund rescue last year to shore up the economy after political and economic shocks ravaged its stash of gold and currencies, as well as the hryvnia. Since then, only $6.6bn has reached Kiev, with disbursements on hold for a year because of government wrangling and delays in reforms.
The central bank has plugged some of the gap by buying dollars on the market: reserves have advanced beyond three months of imports - a key threshold for economists determining a nation’s financial health. While a Bloomberg survey predicts they’ll swell to $16bn by year-end, that’s well short of the $20bn they could have reached with the IMF on board, according to investment bank Dragon Capital.
“The central bank can’t look into the future with confidence,” Olena Bilan, Dragon’s chief economist, said by phone. “The current level of reserves is only sufficient to withstand small and short-term pressure on the hryvnia.”
Amid higher prices for Ukrainian exports such as steel, the central bank has bought a net $1.5bn this year. Reserves edged up to $14.1bn from $14bn the previous month, missing the $14.4bn estimate in a Bloomberg survey of five economists.
“We’ve been actively buying foreign currency since April as global market conditions turned favourable,” Oleg Churiy, the central bank’s deputy governor in charge of foreign-exchange policy, said in an interview. 
“Being in the IMF programme would have spurred foreign investments and allowed us to replenish our reserves more actively.”
The situation isn’t critical at present. The economy is recovering from a 1 1/2-year recession, international investors have driven bond yields down to levels not seen in more than two years and the government sees IMF funding resuming this month or next. 
Reserves have more than doubled since plummeting to $5.6bn in February 2015 after a second revolution in a decade and amid a violent insurgency.
The hryvnia is also stable, and analyst expectations for weakening may be overblown, according to Churiy. 
Unlike previous years, state energy company Naftogaz has been accumulating its own foreign-currency reserves and won’t need to buy as much on the market to cover natural gas imports for the winter, he said.