The hryvnia continues to strengthen against the background of another auction of government bonds

Yesterday, at the interbank market, the hryvnia exchange rate continued to strengthen against the dollar, but it is worth noting that the consolidation has slowed and the market have stabilized the exchange rate without the intervention of the NBU.

the Active involvement of resources to cover the budget deficit attracts additional volumes of foreign currency through the auctions for the sale of internal government bonds, which leads to the strengthening of the hryvnia on the interbank market.

a Week ago, the Ministry of Finance of Ukraine carried out a placement of bonds of internal state loan (government bonds) in the amount of 10,088 billion UAH at the average rate of return 18,25-19.5% per annum for UAH and 6.5-to 7.25% for the dollar-denominated government bonds, depending on maturity.

we will Remind, on March 26, the Ministry of Finance of Ukraine as a result of placing of bonds of internal state loan has attracted to the State budget of 5.4 billion hryvnia.

19 March, the Finance Ministry attracted to the state budget UAH 12.5 bn, March 13 – 3.5 billion.

Today the Finance Ministry will hold another auction for the sale of internal government bonds and the market participants are not willing to continue to strengthen the exchange rate, since the risk of growth of the hryvnia in the second half of the year, while payments for such bonds, can cover the whole return on bonds.

Political pressure on the hryvnia to the dollar from future elections of the President of Ukraine is not observed, although analysts expected a small rise in connection with high probability of winning of a candidate with no political experience running the country.

the Slowdown in export the agricultural. products in the coming months will reduce the proceeds that can lead to pressure on the hryvnia. Also the need for the payment on loans of about $ 1.5 billion in may will also increase the burden on the budget of Ukraine.