Liquidity up slightly

Обзор облигаций 22.02.2016 Banking sector liquidity recovered slightly last Friday, up UAH1.16bn to UAH113.05bn, as banks' correspondent accounts with the NBU declined UAH2.31bn to UAH36.92bn and total CDs outstanding increased UAH3.47bn to UAH76.13bn. Banks' purchased a significant UAH7.37bn of 14-day CDs, the largest amount since the beginning of January 2016, when it purchased UAH11.70bn. Investment implications: Liquidity slightly recovered and funds were reallocated to CDs last Thursday, as shown in last Friday's indicators, most likely due to strengthened local currency and a calmed FX market. Banks' prefer 14-day CDs as this maturity is the longest available with daily tenders. With month-end tax payments liquidity should decline slightly, mostly at the end of this week.