Bonds: Liquidity recovers further

Обзор облигаций 15.10.2014 Banking sector liquidity significantly recovered yesterday, more as a result of new injections from the NBU than on domestic QE support. Banks' correspondent accounts with the NBU rose just UAH0.06bn to UAH29.14bn while total CDs outstanding rose UAH1.89bn to UAH16.68bn and total local currency debt repayments scheduled for the next 30 days increased UAH2.16bn to UAH6.45bn. As a result, broader banking sector liquidity recovered to almost UAH50.0bn, up UAH4.11bn to UAH49.28bn. KyivPrime interest rates diverged: the KyivPrime ON interest rate rose 115bp to 9.60% while the KyivPrime 1M interest rate fell 40bp to 15.30%. Investment implications: The recovery in liquidity recovered more as a result of increases in CDs outstanding and future debt repayments than on domestic QE support.