The MoF borrowed UAH5.5bn (US$313m) with a decline in interest rates.
The shortest paper sold yesterday matures in 2024. This paper usually sees low demand; this time seven bids amounted to UAH21.7m (US$0.6m). All bids had an interest rate of 18.3% (unchanged for the fourth consecutive week) and were accepted fully.
The MoF offered military bills maturing in January 2025, in the amount of UAH5bn (US$140m), but demand was smaller, UAH2.6bn (US$71m), and interest rates were in the range of 18.9‒19.1%. Although the highest interest rate was similar to last week's cut-off rate, the main part of demand was at 18.9%. Therefore, the MoF decided to accept only 19 bids out of the 49 received, selling UAH2.4bn (US$67m), and decreasing the cut-off rate by 20bp to 18.9% and the weighted average rate by 19bp to 18.9%.
The MoF offered a “reserve" note in the amount of UAH3bn (US$82m). Demand exceeded the offered amount for the first time since May: the MoF received 23 bids for UAH6.2bn (US$169m), but sold only UAH3bn of these notes. The MoF set the cut-off rate as usual at 19.75%, and satisfied bids with lower rates in full, and bids with a 19.75% interest rate and non-competitive demand partially, in proportion to their amount within the rest of the cap.
We can assume that demand for UAH bonds remains large, concentrating on "reserve" and military securities, as banks prefer "reserve" notes to cover part of mandatory reserves and, together with traders, to satisfy demand from retail investors.
