Banking sector liquidity increases

Обзор облигаций 29.12.2014 Broader banking sector liquidity rose UAH1.33bn to UAH56.30bn last Friday to a new record high of the month. This increase was caused by significant increase in banks' correspondent accounts with the NBU by UAH2.29bn to UAH36.63bn while total CDs outstanding declined UAH0.97bn to UAH16.12bn and total local currency debt repayments scheduled for the next 30 days remained steady at UAH3.56bn. KyivPrime interest rates slightly diverged last Friday: the KyivPrime ON interest rate rose 10bp to 16.60% while the KyivPrime 1M interest rate remained steady at 19.40%. Investment implications: At the end of last week liquidity rose without significant inflows from the NBU and the MoF. There were no debt repayments or bonds purchases by the NBU. Also, the NBU did not issue new large loans for banks. Liquidity continued to rise prior the end of the year prior to the last day of month-end tax payments.