MinFin raises UAH 6.0 bln from local bonds, lowers interest rates
Ukraine’s Finance Ministry raised UAH 6.0 bln at its weekly bond auction on July 9 after raising UAH 8.0 bln at the auction last week. MinFin placed five types of UAH-denominated bonds with maturities ranging from four months to six years.
Around the half of the auction receipts – UAH 2.9 bln – came from the sale of 6Y bonds to 17 bidders with a weighted average interest rate of 15.84% (vs. 15.85% two weeks ago). MinFin also satisfied 13 out of 17 bids for 3Y bonds for UAH 1.2 bln with a weighted average interest rate of 16.75% (vs. 16.93% last week). In addition, 27 out of 48 bidders were successful in buying 1Y bonds for UAH 1.0 bln with a weighted average interest rate of 17.99% (vs. 18.23% last week).
The rest of the bond auction receipts came from the sale of 4M and 7M bonds. The interest rate for 4M bonds decreased to 17.24% from 17.44% last week. The government satisfied eight out of 11 bids for 4M bonds, raising UAH 0.5 bln. The other UAH 0.5 bln came from the sale of 7M bonds to ten out of 22 bidders with a weighted average interest rate of 17.47% (vs. 17.91% last week).
Evgeniya Akhtyrko: The risks of the Ukrainian local bond market are declining. The interest of market participants in UAH-denominated bonds remains high despite the further decline of interest rates. It looks like there is a market urge for the National Bank of Ukraine to lower the key policy rate from its current 17.5%.