Low liquidity at month's end

Обзор облигаций 02.03.2015 As banking sector liquidity finished February at its lowest level, broader banking sector liquidity fell UAH3.80bn through last Friday to UAH47.77bn, the lowest level this year. Banks' correspondent accounts with the NBU declined UAH2.39bn to UAH27.30bn and total CDs outstanding fell UAH1.41bn to UAH16.72bn. Local currency debt repayments scheduled for the next 30 days remained steady at UAH3.75bn. KyivPrime interest rates significantly rose: the KyivPrime ON interest rate rose 155bp to 18.80% while the KyivPrime 1M interest rate rose just 55bp to 22.80%. Investment implications: If the NBU issued UAH1.0bn of 13-day loans last Thursday, per last Wednesday's tender, this could have had an impact on liquidity. However, last Thursday's outflows via the FX market and month-end tax payments caused liquidity to decline significantly last Friday, of which the cash flows should be included in today's indicators to show a further decline in liquidity.