Even distribution of demand

Yesterday, the Ministry of Finance attracted almost UAH7.5bn (US$253m) to the budget through local-currency bills, more than 50% more than last week's borrowings.

Demand at the auction was distributed almost evenly between short-term zero-coupon bills maturing this year and the new 1.5-year paper — UAH3.7bn (US$126m) and UAH3.8bn (US$130m), respectively, at face value.

Lowest, and almost identical to last week was demand for three-month securities at UAH1.3bn (US$46m), but the amount of bids for six-month paper fell slightly from UAH3.5bn (US$119m) last week to UAH2.4bn (US$81m) yesterday.

The 1.5-year paper, as expected, received the greatest demand yesterday. The total volume of bids was just UAH87m (US$3m) last Tuesday, and yesterday's demand was up more than 44 times, most likely thanks to investors who decided to diversify their support to the government during wartime by buying longer bills.

The total amount of funds received by the state budget from the domestic bond market in May has already exceeded UAH19bn (US$644m). If the level of demand remains close to yesterday's for the next two weeks, we can expect that the level of domestic budget financing will remain stable at about UAH30bn (US$1bn) per month.

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Official results on issuance of domestic bonds