Liquidity recovers

Обзор облигаций 10.03.2015 Broader banking sector liquidity rose UAH2.57bn last Friday to UAH60.30bn, after having fallen significantly at the beginning of February. Banks' correspondent accounts with the NBU slid UAH0.37bn to UAH25.82bn while total CDs outstanding rose UAH2.94bn to UAH26.10bn. Total local currency debt repayments scheduled for the next 30 days remained steady at UAH8.38bn. KyivPrime interest rates slightly diverged: the KyivPrime ON interest rate rose 8bp to 21.25% while the KyivPrime 1M interest rate remained steady at 27.00%. Investment implications: Without new injections, as only the NBU's 3-month loans were received by banks last Thursday, the broader indicator rose UAH2.57bn. Before the new reserve requirements take effect, the NBU continued to increase its CDs outstanding and most likely injected some funds via the FX market, purchasing FX last Thursday. We could see liquidity decline, albeit slightly at worst, this week due to the increase in bank reserves.