Last week's increase in UAH bond interest rates boosted demand for primary placements, allowing the MoF to double proceeds from UAH military bills this week.
At Mar. 18 primary auction the greatest demand was for 15-month bills in 55 bids, which amounted to over UAH9.5bn. Most bids had yields not higher than 16.35%, which was last week's cut-off rate. Therefore, the MoF rejected six bids and partially satisfied some bids. The cut-off rate remained unchanged, while the weighted-average rate rose by 4bp to 16.35%.
Demand for 2.3-year military bills was slightly above UAH5bn, but some bids required yield increases, which the MoF rejected. Therefore, the MoF borrowed UAH3.4bn without changes in the cut-off rate. The weighted-average rate rose by 1bp to 17.45%.
Additionally, the MoF offered EUR200m of 13-month bills. This offering received EUR189.5m of demand, whereas just one bid for EUR0.5m required a rate increase. The MoF satisfied all bids with up to a yield of 3.25% and set the weighted-average rate at 3.24%.
The state budget received over UAH17bn of proceeds, including half in hard currency.
