At yesterday's auction, the MoF raised only UAH2.1bn for the budget, of which only UAH350m (US$12m) was in hryvnia.
FX-denominated bills, again, became a key source of funding. Through this instrument, US$60m or almost UAH1.8bn was raised: US$47m through semi-annual securities at a rate of 3.5% and US$13m through 12-month bills at a rate of 3.7%.
However, as was the case last week, UAH-denominated bills were not in demand. The auction received 52 bids, but for only UAH356m (US$12m) at face value. The vast majority of demand, UAH312m (US$10.5m) in 23 bids, was submitted for two-month paper, while semi-annual and 12-month bills received UAH32m (US$1m) and UAH12m (US$0.4m) of demand, respectively.
Rates on all military bills in local currency remain unchanged at 9.5‒11.5%, causing a further decline in demand for UAH-denominated instruments. Yesterday, the demand for them was the lowest of all placements since the NBU key policy rate was raised to 25%. Therefore, if attempts to keep rates at the previous level continue, the volume of borrowings from hryvnia instruments will remain low.
