On February 12, the Ministry of Finance hosted a Round table on its policy on the domestic bond market in 2016. The meeting was attended by Deputy Minister of Finance Artem Shevalev and deputy Head of the National Bank Oleg Churiy.
The Ministry of Finance is actively working to recover the public financial system and to reduce the debt burden on the state budget. One of tools for this is a well-balanced policy in regard to domestic bonds. The key principles of the policy on domestic bonds which serve as a guide to the Ministry of Finance as well as the cooperation between the Ministry and the National Bank in this area were the key points on the agenda of the meeting.
«In January we resumed our auctions to place domestic state bonds on the market. We are ready to see a significant interest in our bonds coming from private banks which was reflected in the results of all latest auctions conducted by the Ministry of Finance. We hope that the relative stability of the currency exchange rate and the improved macroeconomic data will contribute to the ever increasing interest of domestic creditors to our bonds», Deputy Minister of Finance Artem Shevalev said.
Deputy Head of the National Bank Oleg Churiy told that after the return of the Ministry of Finance to the domestic bonds market the National Bank had stopped the sale of the domestic bonds on the secondary market as well as suspended placing its three-month deposit certificates. Accordingly, the yield curve of the bonds is almost set now: the Ministry of Finance proposes a full set of domestic bonds with the maturity period ranging from three months to three years, whereas the National Bank offers deposit certificates ranging from overnight to one month.
The deputy Head of the National Bank also noted that the interest of the banks for the domestic bonds is expected to rise. «Currently, the National Bank is holding 75% of the domestic public debt, commercial banks only have 25%. At the same time, commercial banks hold approx. UAH 80b in the deposit certificates of the National Bank. If the macroeconomic situation is stabilized and the inflation slows down, the interest rate of the NBU and the yield on its deposit certificates will go down motivating banks to re-direct their money from the deposit certificates to long-term domestic public bonds», Oleg Churiy pointed out.
The Round table meeting was also attended by Director of the Ministry of Finance Department for Debt Policy Galyna Pakhachuck, Head of the NBU Department for Open Market Operations and Placement of Public Securities Mykola Selekhman as well as representatives of banks and financial companies in Ukraine.