Borrowings increase despite increased tensions

The amount of funds raised at yesterday's auction rose to UAH3.5bn despite geopolitical risks and increased tension coming from the Russia.

Mostly in local currency, borrowings came through three-month bills, which provided the budget with UAH3bn, another UAH229m were borrowed through 11-month securities, and the remaining, almost UAH60m, were from instruments maturing between one and four years. The budget received another EUR7.2m from four-month FX-denominated bills.

Interest rates did not change much. The increase occurred only in three-month bills by a mere 10bp to 11.6%. For 11-month and four-year instruments, cut-off rates slid by 7bp and 1bp, respectively, to the level of weighted average rates of the previous auction. There was no competitive demand, and the Ministry of Finance again used its right to accept non-competitive bids at the level of the previous auction.

With today's repayment of UAH18bn, some activity from Ukrainian banks was to be expected, but it was restrained by the deterioration in the geopolitical situation due to the recognition by the Russian Federation of the self-proclaimed republics in the Donbass region. So for now, this could be seen as a very good result for the primary auction and allows at least partial refinancing of today's redemptions.

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Official results on issuance of domestic bonds