Liquidity declines slightly

Обзор облигаций 30.07.2015 Banking sector liquidity declined UAH0.58bn yesterday to UAH78.38bn, after receiving a portion of funds from the NBU via bond purchases. Banks' correspondent accounts fell UAH1.59bn to UAH21.75bn while total CDs outstanding rose UAH1.02bn to UAH48.93bn. Total local currency debt repayments remained steady at UAH7.70bn. KyivPrime interest rates remained steady at 19% an 24% for ON and 1M interest rates, respectively. Investment implications: While no debt repayments were scheduled, the UAH1.20bn non-market issuance of bonds, most likely for the DGF, was immediately sold via banks to the NBU. We concluded this was the case because both total government bonds outstanding and the NBU portfolio both rose after Tuesday's deals by the same amount while the total turnover of long-term bonds was twice that volume. This injection most likely covered some outflows and resulted in a slight decline in liquidity.