The primary bond market is still inactive without much interest from foreigners and with restrained demand from domestic investors.
Although the volume of borrowings increased yesterday, it remains small and did not improve domestic budget financing.
In general, demand amounted to UAH2.6bn at a mostly unanimous level of rates. Only for 13-month bills was the minimum rate lower than the vast majority of demand.
Therefore, the Ministry accepted all submitted bids. Caps for two instruments did not have any impact, as demand was lower.
Thirteen-month bills were the most in demand, with 27 bids totalling UAH1.6bn at face value. Although the minimum rate was 11.09%, it did not affect the weighted average rate due to its small volume.
Demand for one-and-a-half-year and two-year bills was in 12 and 21 bids, respectively, while volume was higher for the shorter one, UAH0.7bn and UAH0.3bn, respectively.
In total, almost UAH2.7bn was raised for the budget, which was more than last week, but it is just almost one-quarter of today's redemptions. It looks like domestic investors are waiting for the Ministry of Finance to possibly review its interest rate policy and agree to a rate hike to increase borrowing amounts.