Demand for local-currency bills continued to decline. Most of the proceeds from yesterday’s auction were a partial refinancing of FX-denominated repayments. Borrowings amounted to UAH536m and US$116m, and at the current exchange rate, the total amount of proceeds was UAH3.7bn.
Local-currency bills with maturity after the presidential elections were not seen as attractive. With debt repayments mostly going to the NBU, these two factors reduced demand for UAH-denominated bills. However, all of yesterday’s bids for these bills were at acceptable rates for the MoF, and proceeds covered repayments to market players.
At the same time, refinancing of FX-denominated repayments was very important for the MoF. Tomorrow, the Ministry must repay US$287m in principal and interest on bills issued at the end of January. But by offering one-month bills, the MoF was able to refinance less than a half of these repayments.
Without foreign investors, demand for local-currency bills significantly declined, and most of financing was from FX-denominated bills. But the market did not find these bills very attractive, and the MoF was only provided partial compensation of the FX it used from its own accounts.