Yesterday, demand was more than triple supply, but the Ministry of Finance kept their caps unchanged. At the same time, the MoF’s stubbornness in maintaining the cap combined with the significant demand, allowed the Ministry to reduce the cost of borrowing sharply.
Demand for one-year bills was twice the cap. Interest rates on this bill changed the least: the cut-off rate decreased by 7bp, and the weighted average by 9bp to 14.98% and 14.96%, respectively.
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The two-year paper was three times oversubscribed. Interest rates decreased to 15.9%, the cut-off rate by 18bp, and the weighted average by 17bp.For the third week, the rates on three-year notes fell the most. The cut-off rate decreased by 31bp to 16.62% and the weighted average rate by 36bp to 16.57%. This paper was six times oversubscribed.
So, since March, a little more than two months after the start of the spring cycle of monetary policy easing, rates on UAH-denominated government bonds have already decreased by 170‒193bp, which is significantly more than the NBU's rate cut.
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