In January-October 2024, the Government of Ukraine raised about UAH 498 billion (equivalent) from the sale of domestic government bonds at auctions. This was reported by the National Bank of Ukraine.
According to the NBU Depository, the equivalent of UAH 363.98 billion, USD 2.54 billion and EUR 754.9 million was raised. In October, the Ministry of Finance’s domestic borrowings exceeded repayments on domestic government bonds by UAH 33.26 billion, and over ten months by UAH 183.63 billion.
Rollover growth and new opportunities for banks
The level of rollovers of investments in domestic government bonds over this period was 146% in different currencies at the current official exchange rate. In total, from the beginning of the full-scale war and until 31 October 2024, the government raised almost UAH 1.316 trillion in equivalent at primary auctions.
It is worth noting that the NBU has expanded the ability of banks to cover their required reserves by allowing them to use benchmark government bonds from a specific list, which helps to strengthen the liquidity of the banking system.
Attractive market rates in the domestic market
In October, the Government offered market rates for domestic government bonds: the maximum yield in hryvnia reached 16.8% p.a., and in US dollars – 4.66% p.a. No euro-denominated domestic government bonds were placed in October. Such high rates are intended to stimulate demand for bonds, attracting both domestic and international investors amid the need to finance the budget deficit and support the economy in the wartime.
The NBU and the government are working together to maintain the stability of the financial system, using various instruments to raise funds and manage public debt.
