Liquidity down at month's end, as expected

Обзор облигаций 06.05.2015 Following month-end tax payments, liquidity declined as expected. The MoF's treasury account reached UAH23.56bn, down UAH3.11bn from the end of March. Broader banking sector liquidity declined only UAH1.38bn to UAH51.91bn. Total local currency debt repayments scheduled for the next 30 days increased a significant UAH1.23bn to UAH6.25bn, perhaps to offset a more severe decline in liquidity, while banks' correspondent accounts with the NBU rose only UAH0.35bn to UAH23.21bn. Total CDs outstanding fell UAH2.96bn to UAH22.45bn. KyivPrime interest rates declined: the KyivPrime ON interest rate slid 8bp to 22.25% while the KyivPrime 1M interest rate declined 20bp to 27.80%. Investment implications: The NBU slightly supported banks with liquidity at the end of April as it refinanced ON loans, slightly increasing their volume to UAH1.14bn last Thursday, and repaid UAH2.96bn of CDs that day. Outflows exceeded UAH3.0bn that day, providing a higher volume of funds in treasury accounts. The MoF did not exceed last month's record, most likely because of the additional month-end expenditures which normally would be scheduled for the first days of May.