Liquidity continues to recover

Обзор облигаций 08.05.2015 Broader banking sector liquidity rose 3.92% yesterday, up UAH2.06bn to UAH54.58bn, including fund reallocations. Total CDs outstanding rose UAH2.96bn to UAH27.76bn while banks' correspondent accounts with the NBU slid UAH0.19bn to UAH21.27bn. Total local currency debt repayments scheduled for the next 30 days declined UAH0.70bn to UAH5.55bn. KyivPrime interest rates slightly diverged: the KyivPrime ON interest rate rose 25bp to 21.25% while the KyivPrime 1M interest rate remained steady at 27.75%. Investment implications: On Wednesday, the NBU once more refinanced UAH0.10bn of ON loans issued for banks last week but absorbed a large portion of extra liquidity via CDs. The MoF's debt repayments appear to have been mostly received by the NBU, having a negative impact on liquidity. We do not anticipate liquidity to decline today, but definitely do not expect broader banking liquidity to rise significantly above UAH60.0bn anytime soon.