The hryvnia continues to strengthen against the backdrop of the sale of government bonds

2020-12-15 12:03:14
Machine translation
The hryvnia continues to strengthen against the backdrop of the sale of government bonds

As we predicted the hryvnia actively strengthened against the background of increasing speculative capital inflows releasing the government of hryvnia government bonds. The increase in currency supply on the interbank market from non-residents wishing to invest in hryvnia government bonds became the reason of depreciation of the dollar against the hryvnia in the past week 1% x 28,14/16 to 27.84/of 27.85 UAH/USD.


According to the national Bank, in the period from 7 to 11 December, the regulator bought on the interbank market $79 million indicating a surplus of currency in the market.


the Problems with financing the budget deficit and the lack of support from the IMF is forcing the Finance Ministry to increase the cost of borrowing in the bond market, which gives the opportunity to increase borrowing.

last week the Finance Ministry sold the bonds at 10.2 billion under 10-12% per annum depending on maturity.

Today will be once the government bonds from the Ministry of Finance, which again will show if it placement on the dollar on the interbank market and how much will continue to strengthen the hryvnia.


an Additional source of financing the purchase of government bonds was the issuance of additional refinancing from the National Bank of Ukraine 20 banks in the amount of 11.11 billion. for the period up to 1820 and 84 days at 6% per annum.


most of the money this time got Alfa-Bank (which by the way is owned by Russian shareholders) to 4.46 billion for a period of 5 years secured pool of liquid assets (government bonds).

Also refnance received: FUIB UAH 1.5 bn, Ukreximbank - 1 billion UAH, Universal Bank - 1 billion UAH, Bank - UAH 600 million, Alliance Bank - 500 million UAH 460 mln UAH, TA - 230 million UAH, Bank Lviv - UAH 216 million, the Bank Globus - UAH 213 million, Piraeus Bank ICB - 210 million UAH, MTB Bank - UAH 150 million, Radabank - 100 million UAH, RVS Bank - 100 million UAH, the Bank Concord - 87900000 UAH Bank of the Ukrainian capital of 50 million UAH Poltava-Bank - UAH 80 million, Allbank - 55 million UAH, Commercial industrial Bank (CIB) - 50 million UAH, Agroprombank Bank - 40 million UAH.


Note, almost a month ago, the NBU provided refinancing of 16 banks for a total amount 16,577 billion.

the Scheme to commercial banks that refinance at 6% and then buy for that money Treasury bonds under 10-12% annual giving pledge these bonds are very profitable, but it is not clear how such refinancing help Ukrainian business to increase their income and then to increase revenues to the state budget.

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