MinFin raises UAH 2 bln at weekly local bond auction

30 September 2020

Ukraine’s Finance Ministry raised UAH 2.0 bln at its weekly bond auction on Sept. 29, compared to UAH 0.3 bln at the auction last week. The auction receipts came from the placement of 6M, 1Y and 2Y bonds.

 

The lion’s share of the auction receipts – UAH 1.9 bln – came from the sale of 6M bonds to two out of three bidders at 8% (vs. 7.82% for these bonds two weeks ago). Nine out of 11 bidders were successful in purchasing 2Y bonds for UAH 88 mln at 10.50% (vs. 10.43% for these bonds two weeks ago). The rest of auction receipts – UAH 25 mln – came from the sale of 1Y bonds to three out of six bidders at 9.50% (vs. 9.46% for these bonds a week ago).

 

Evgeniya Akhtyrko: The rising interest rates at this latest bond auction was not sufficient to boost demand for local Ukrainian bonds. As previously, most of the auction receipts were likely generated by the state-owned banks.

 

The recent low volumes of raised state debt will pose problems for financing budget deficits in the coming months. In this situation, the government’s will have to noticeably hike interest rates for local bonds and/or restrain budget expenditures.