Liquidity rises above UAH60bn

Обзор облигаций 13.01.2015 Broader banking sector liquidity rose UAH0.71bn to UAH31.23bn yesterday, a record high since the beginning of October 2014. Funds were slightly reallocated as banks' correspondent accounts with the NBU fell UAH1.22bn to UAH35.56bn and total CDs outstanding rose UAH1.93bn to UAH19.65bn. Total local currency debt repayments scheduled for the next 30 days remained steady at UAH6.02bn. KyivPrime interest rates continued to decline after significantly rising at the end of last year: the KyivPrime ON interest rate fell 292bp to 13.33% and the KyivPrime 1M interest rate slid 17bp to 19.33%. Investment implications: Decreasing its support last Friday, the NBU issued only UAH0.29bn against UAH1.23bn of NBU loan repayments. Although the NBU also absorbed 1.93bn of funds, banks' correspondent accounts with the NBU remained high. We expect liquidity to remain high this week following month-end tax payments and other deals that took place at the end of last year.