Yesterday, the MoF accepted all demand, but the amount of funds raised was low. However, rates decreased for some issues.
In total, bids amounted to UAH293m, which was inadequate to cover today's debt repayments of UAH7bn. Bidders did not request rates increase. Instead some bids had rates lower than at previous auctions.
Most of demand was for three-month bills. Three bids came in with rates at 7.1-7.24%, which was not higher than last week. The MoF accepted all bids keeping the cut-off and weighted-average rates unchanged at 7.24%.
Twelve-month bills received just one bid with a rate 20bp below the auction of two weeks ago. Therefore, it made no sense to reject this demand.
The Ministry decreased rates for two-year bills also. There were three bids; likely only one was competitive. Therefore, bids were accepted using the rate from the competitive bid, which decreased the cut-off rate by 20bp and weighted-average rate by 19bp, both to 10.2%.
It appeared that most investors who received today's debt repayments preferred not to reinvest funds in the primary bonds market. They likely prefer to purchase new bills in the secondary market where yields are a bit higher with a better assortment of maturities. It is possible that recent fluctuations in the foreign exchange market have not added to the attractiveness of UAH-denominated instruments.
