Yesterday, the Ministry of Finance refinanced most of this week's redemption, mainly using "reserve" bonds. In general, the demand at the auction was concentrated in military and "reserve" securities.

The MoF sold mostly "reserve" bonds, which were purchased by 15 participants for more than UAH6.3bn (par value). Most likely, they were bought by banks, which still have the opportunity and need to cover part of the required reserves with government bonds.

Interest in military bonds also increased. The number of bids was lower than last week, but this could have been banks and traders preparing for today's redemption to provide clients with enough bonds to reinvest this repayment.

Of the two military bills sold yesterday, the 15-month paper called "Yalta" brought more funds to the budget: UAH 2.2 billion against UAH 1.8 billion raised using paper due in March of next year. The ratio could have been different, but the MoF did not agree to raise the rate on 11-month paper by 50bp to 19%, rejecting the UAH0.5bn bid. So, the YTMs did not changed this time either.

The Ministry of Finance also sold ordinary bills maturing in October 2024, but demand was insignificant, only UAH0.5bn.

Almost UAH10.9bn was borrowed for the budget, making it possible to refinance 86% of today's repayments. Thanks to such activity, the level of refinancing has improved, and the next auctions in April will allow this indicator to improve even in the case of lower investor activity.

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RESEARCH TEAM: Taras Kotovych.

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