The decrease of yield can reduce the supply of currency on the interbank market

At yesterday's auction of government bonds the Ministry of Finance brought in a budget of USD 4.655 billion, by implementing the following securities:

1,2-summer the dollar by 3,88% in the amount equivalent to 18,8 million UAH,

2-year us dollars at a 4.08% in the amount equivalent to 35 million UAH,

3-year-old in the national currency by 13.06% and for the amount of 3,309 billion.

• 3-month in the national currency by 13,06% per annum on the amount of 55.4 million UAH,

the Ministry of Finance continued to lower rates of return and for the first time placed a dollar t-bills at an interest rate less than 4%. However, non-residents are more interested in the hryvnia paper with high yields, whereas foreign exchange they buy much less.

due to the suspension of cooperation with the IMF the Ministry of Finance was forced to increase external borrowing to cover the budget deficit.

the Cabinet decided to reallocate the funding sources of the General Fund budget, for the failure of the privatization plan in 2019 by Order No. 1104-R, the government has increased financing of the budget code "loans" by 16.4 billion UAH, as the plan proceeds through the code "Revenues from privatization of state property" for the year 2019 is reduced from 17.1 billion to 0.7 billion.

Because the currency market of Ukraine is highly dependent on external influence, reduction of receipts of currency from buyers of government bonds can change the dynamics of the hryvnia.

on the interbank market Yesterday, as usual during the auction, the hryvnia strengthened, but not as much as expected. Investors sold the currency, and reinvested funds received from redemption of government bonds. The excess supply in the amount of 30 million $ bought the national Bank than to equate supply and demand and strengthened the dollar to 23,945/23,965 UAH/$.

According to analysts, in anticipation of the Christmas holidays foreign exchange earnings for the purchase of government bonds will decrease and the torque will gradually devalue in search of runswitch levels.