Ukraine allocated another $630 to the state budget from the sale of bonds

Twelve-month military bills saw greater demand than last week at almost the same interest rate on offer, 14.65%, so they did not require an increase in the cut-off rate.

Therefore, the Ministry of Finance sold the planned UAH 5 billion of bonds without changing interest rates. Interest rates also remained unchanged for the 1.5-year military issue.

Just like a few weeks earlier, most offers had an interest rate of 15.25%. The total demand amounted to UAH 22 billion against the ceiling of UAH 5 billion.

Only 2.5-year military securities saw a significant portion of demand below last week’s cut-off rate, pushing the weighted average rate up 1 basis point to 16.24%.

Although the Ministry of Finance accepted only a quarter of the demand for this instrument, the limit interest rate remained unchanged at 16.25%. All three military accounts were in surplus, but the Ministry of Finance reported that it had accepted all offers, so most offers were accepted partially within the limit and in proportion to the size of the offer.

For the first time this month, some 3.5-year bond offers saw interest rates below the threshold level of 16.75%.

However, this demand was low and did not affect the weighted average interest rate. In addition, the Ministry of Finance sold new 12-month currency bills worth USD 200 million.

The Ministry rejected two offers requiring an increase in the border rate and left it unchanged at 4.62%. Finally, the Ministry of Finance must be satisfied with this auction, which generated huge demand and budget revenues without offering reserve bonds.

The significant oversubscription of military bonds leads to the expectation that reserve bonds will not return this month.

However, most offers have interest rates at or slightly below the cut-off, so bond rates should remain almost unchanged soon.

The views expressed in this opinion article are those of the author and are not necessarily those of Kyiv Post.