Ukraine to join Clearstream in 1Q19

Ukraine will join the Clearstream global securities
depository system in 1Q19, opening access for international investors to its domestic
bond market, the National Bank of Ukraine (NBU) reported in an Oct. 1 press
release. The project is being implemented by the NBU, Clearstream and Deutsche
Börse group.

Using the Clearstream system, investors will be able
to make payments for Ukrainian government bonds in Ukraine’s national currency,
which will cut transaction costs. The NBU believes that this will also raise
demand for Ukrainian securities, fostering their liquidity. In turn, the
Ukrainian government will benefit from access to international sources of
long-term lending and lowered costs of debt resources. The project is “an
important step in transforming Ukraine into a full-fledged player at the
international debt markets,” said NBU Governor Yakiv Smoliy, according to
the press release.

Evgeniya Akhtyrko: We agree
with the NBU’s outlined benefits of joining the Clearstream system. Currently,
non-residents hold only 1% of Ukrainian government’s local debt. Meanwhile, the
ability of local market players to general debt resources for MinFin is weak.
Nevertheless, easier access to the market must be accompanied by sustainable
economic growth and other government actions to protect investor rights.