Twelve-month and 3.5-year securities usually saw the least demand in the auction – this week the Finance Ministry borrowed more than Hr.10 billion ($245 million). However, demand was highly volatile.
Two weeks ago, the demand was estimated at Hr.2.7 billion; last week, it fell to Hr. 0.9 billion; and this week, it surged to Hr.2.4 billion.
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No bids required an interest rate increase, so the MoF satisfied demand in full and increased the weighted average rate by 2bp to 14.65%, the same level as the cut-off rate.Two and three-year bonds were oversubscribed for the second week.
Interest rates in demand were similar to the previous week—mainly at the cut-off level—while the share of non-competitive bids declined.
ICU analysts not see any changes in interest rates for these instruments.
The MoF slightly decreased the weighted average rate for EUR-denominated bills by 2bp to 3.22%. The lowest bid rate was 3.14%, which impacted the final rates as competitive demand was less than half of all bids.
Interest rates for UAH bonds expectedly were unchanged, especially prior to the NBU monetary policy committee.
The bond market anticipates the NBU will keep its rates unchanged so that bond rates will stay at this level too soon.
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