Eastern Europe taps $430 billion reserve to shield currencies

Eastern Europe taps $430 billion reserve to shield currencies

Bloomberg: Some East European nations are dipping into their international reserves to prop up currencies hit by the fallout from Russia’s invasion of Ukraine.

Boosted by years of European Union transfers and strong growth, the region’s four biggest economies have amassed foreign reserves totaling roughly $430 billion. All have stockpiles large enough to cover three months’ worth of imports — in line with international recommendations — led by the Czech Republic, which has reserves that would last for more than a year.

ING Groep NV said the size of each country’s reserves has helped shape policy responses. Hungary, whose stockpile is relatively smaller, opted for a bigger-than-expected interest rate increase on Thursday. Poland — with reserves equal to seven months of imports — sold foreign currency on the market.