Liquidity reallocates to banks' accounts

Обзор облигаций 24.05.2016 There was a significant reallocation of funds from CDs to banks' accounts with the NBU yesterday, causing a UAH1.18bn decline in liquidity to UAH93.92bn. Banks' correspondent accounts with the NBU increased UAH4.09bn to UAH39.77bn while total CDs outstanding fell UAH5.27bn to UAH54.15bn. Investment implications: Liquidity continued to decline with fund reallocations from CDs prior to the primary bond auction scheduled for today. As fund needs for month-end tax payments also must be met, liquidity should continue to decline below 90bn, hitting levels seen at the beginning of December 2015.