Ukraine weekly bond auction receipts nearly double

The Ukrainian Finance Ministry’s weekly local bond
auction held on Apr. 17 raised UAH 945.8 mln, nearly doubling after UAH 455.1
mln was attracted last week. The
receipts broke almost evenly between 3M and 6M bonds.

The interest rate of 3M bonds (maturing on July 4)
inched up to 17.36% from 17.33% two weeks ago. MinFin’s cut-off rate for 3M
bonds remained at 17.44%, and only two out of 17 bids were unsatisfied.
Meanwhile, the government hiked the cut-off rate for 6M bonds to 17.20% from
17.10%, while satisfying eight out of nine bids. The resulting weighted average
interest hit 17.13% (vs. 17.10% a week ago). The government did not satisfy any
of three bids for one-year bonds.

Evgeniya Akhtyrko: The increased activity
on the primary local bond market is a good development after the sluggish
results of the two previous April auctions. The government obviously needs the
support of the local debt market for financing the budget deficit and has to
agree to maintain high interest rates amid modest demand. Recall, Ukraine’s
1Q18 state budget revenue fell 3.1% below plan.