Insufficient demand

2 марта 2016 года

The second time this year, the MoF cancelled the auction, rejecting low demand. Of the five bonds offered, the MoF received only three bids for the 6-month and 12-month bonds at low amounts at interest rates above the MoF's yield curve. The 6-month bonds received only one bid at 20.10% for UAH5.5m while the 12-month bond received two bids for a total of UAH56.0m at 19.0% and 20.10%. As the MoF accepted bids earlier this year at 18.5% for these maturities, They decided yet again to not increase interest rates.

Currently, budget performance is not problematic at the MoF has UAH16.83bn at its treasury account as of yesterday morning. While the balance rose little during February, particularly versus the same period last year, funds sufficiently cover current needs without new financing.

Over the next few weeks, auctions are not expected to be very active. Banks will try to force the MoF to move the yield curve up closer to the NBU's yield curve for CDs while the MoF continues its policy to maintain or lower rates and decrease the debt burden by repaying principal without refinancing. As an example,?this year the MoF repaid UAH2.73bn in local currency debt and received only UAH1.35bn in budget proceeds from primary auctions. Through the end of March, the MoF is scheduled to repay UAH1.31bn in bonds in local currency. However, because of the current market situation, these repayments most likely will be refinanced.

Источник: ICU

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