Yield curve of UAH-denominated domestic government bonds placed during past two auctions

The Ministry of Finance increased borrowings yesterday to UAH12.6bn from UAH9.4bn a week before, thanks to the FX-denominated bills offering. Demand for UAH bonds decreased slightly, concentrated in the 14-month paper.

The shortest, 14-month paper, received UAH7.4bn in bids, almost twice the amount offered. Competitive bids were mainly 14.65‒14.7%. So, the Ministry satisfied 26 out of 28 bids, placing UAH4bn of bonds and setting the cut-off and weighted average rates at 14.7%.

Demand for two-year paper fell to UAH600m and to UAH142m for the four-year notes. Therefore, cut-off rates for both instruments remained unchanged at 15.4% for two-year bills and 16.8% for notes due in February 2028. At the same time, the weighted average rates changed by 4bp and 7bp, respectively.

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So, as a result, UAH bonds brought less than UAH5bn for the budget this week.

Most of the funds yesterday were from USD-denominated bills. The Ministry attracted US$189m to the budget, or the equivalent of UAH7.7bn, which increased proceeds by a third compared with the previous week.

 

RESEARCH TEAM

Taras Kotovych

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