Liquidity recovers slightly

Обзор облигаций 26.01.2015 The NBU once more absorbed extra liquidity, increasing CDs outstanding UAH0.69bn to UAH25.31bn last Friday, causing banks' correspondent accounts with the NBU to slide UAH0.21bn to UAH32.11bn. As total local currency debt repayments scheduled for the next 30 days remained steady at UAH6.58bn, broader banking sector liquidity rose a mere UAH0.48bn to UAH64.00bn. KyivPrime interest rates remained steady last Friday as the KyivPrime ON interest rate stood at 11.00% and the KyivPrime 1M interest rate remained steady at 18.25%. Investment implications: Last Thursday there were no inflows from the NBU and the MoF. Insufficient ON loans and no new bond purchases from the NBU and no debt repayments by the MoF provided no liquidity for the banking system. As a result, new absorption by the NBU caused a slight decline in banks' correspondent accounts with the NBU. This week we could see higher volatility and new injections from the NBU via domestic QE support for primary auctions.