Liquidity begins to decline

Обзор облигаций 29.07.2015 After broader liquidity hit a record high on Monday, it declined yesterday, per routine at the end of the month. Broader banking sector liquidity fell UAH1.04bn to UAH78.96bn as banks' correspondent accounts with the NBU slid UAH0.30bn to UAH23.35bn and total CDs outstanding declined UAH1.06bn to UAH47.91bn. At the same time, total local currency debt repayments scheduled for the next 30 days rose a mere UAH0.31bn to UAH7.70bn. KyivPrime interest rates remained steady since 20 July 2015 for the second week, at 19% and 24%, respectively, for ON and 1M funds. Investment implications: Liquidity should continue to decline through the end of this week because of month-end tax payments. We expect further reallocations of funds from CDs to banks' accounts. Liquidity should remain high with significant investments in CDs.