Bonds: Banking sector liquidity falling

Обзор облигаций 14.11.2014 Broader banking sector liquidity fell UAH1.52bn to UAH50.66bn yesterday due to a UAH2.16bn decline in total local currency debt repayments scheduled for the next 30 days by to UAH2.99bn. At the same time, banks' correspondent accounts with the NBU rose UAH0.52bn to UAH31.88bn while total CDs outstanding rose only UAH0.12bn to UAH15.79bn. KyivPrime interest rates slightly diverged: the KyivPrime ON interest rate rose 20bp to 10.20% while the KyivPrime 1M interest rate slid 10bp to 16.40%. Investment implications: The MoF's UAH 2.16bn local currency repayment on Wednesday caused changes in yesterday's liquidity indicators. As total debt repayments significantly fell, banks' correspondent accounts with the NBU and total CDs outstanding should rise if liquidity should remains steady. At the same time, these indicators combined rose a mere UAH0.64bn after receiving UAH1.39bn of additional loans from the NBU. The NBU decreased ON loans by UAH0.18bn as it issued UAH1.50bn of 44-day loans to eight banks.