Liquidity continues to decline

Обзор облигаций 13.02.2015 Banks' correspondent accounts with the NBU significantly rose UAH3.02bn to UAH29.73bn yesterday, causing a slight decline in KyivPrime interest rates. Although this increase was supported by the MoF and the NBU, the broader indicator declined yesterday. The NBU issued UAH1.05bn of loans and decreased total CDs outstanding by UAH2.91bn to UAH19.22bn, while the MoF repaid UAH0.56bn in debt repayments and decreased total local currency debt repayments scheduled for the next 30 days to UAH6.61bn. As a result, broader baking sector liquidity fell UAH0.45bn to UAH54.56bn. KyivPrime interest rates slightly declined: the KyivPrime ON interest rate declined 47bp to 13.20% while the KyivPrime 1M interest rate slid 7bp to 21.60%. Investment implications: Liquidity declined significantly. At least UAH1.6bn was covered by the MoF and the NBU, while the increase in banks' correspondent accounts with the NBU was the result of a fund reallocation from CDs.