Bonds: Liquidity reallocation

Обзор облигаций 12.11.2014 Broader banking sector liquidity rose yesterday UAH0.78bnto UAH53.20bn, this month's record high, due a UAH0.75bn increase in total local currency debt repayments scheduled for the next 30 days to UAH5.15bn. Banks' correspondent accounts with the NBU rose UAH1.10bn to UAH33.88bn while total CDs outstanding declined UAH1.07bn to UAH14.18bn KyivPrime interest rates slightly diverged: the KyivPrime ON interest rate slid 12bp to 9.88% while the KyivPrime 1M interest rate remained steady at 16.50%. Investment implications: Although banks' received UAH1.07bn from CD redemptions, with UAH0.47bn of additional ON loans from the NBU, the increase was less significant. Although liquidity remained steady, interest rates are still high and slightly volatile because of the hryvnia's ongoing devaluation and negative anticipations.