Liquidity increases on reallocations

Обзор облигаций 17.04.2015 The MoF repaid UAH1.57bn on Wednesday in local currency debt repayments and decreased total local currency debt repayments scheduled for the next 30 days to UAH9.74bn. These funds likely were reallocated to NBU CDs as total CDs outstanding rose UAH2.07bn to UAH20.14bn yesterday. Banks' correspondent accounts with the NBU rose by a paltry UAH0.17bn to UAH27.13bn. As a result, broader banking sector liquidity rose just UAH0.67bn to UAH57.02bn. Despite the increase in liquidity, KyivPrime interest rates slightly rose: the KyivPrime ON interest rate rose 8bp to 23.25% while the KyivPrime 1M interest rate rose 21bp to 28.38%. Investment implications: Debt repayments by the MoF on Wednesday, most likely received by the NBU, had no significant impact on liquidity. Liquidity continued to rise slightly prior to month-end tax payments which start next week.