“This mark was reached yesterday, according to the current report of the depository of the National Bank of Ukraine. Since the beginning of the year, the volume of investments of individuals in hryvnia government bonds has tripled. The total amount of investments of citizens in Ukrainian government securities crossed the mark of $832 million.
The reasons are clear:
- High yield (10-12 % per annum);
- Forum of taxes on income on government bonds;
- State guarantee.
And the growing hryvnia adds to the attractiveness of investing in hryvnia securities,” reported Taras Kozak, investment expert.
Record growth in foreign investment in government bonds had a positive impact on the strengthening of the hryvnia, which will last until the end of the year. Solving the issue of servicing or refinancing short-term bonds will play an important role in maintaining the stability of the national currency next year.
On the other hand, due to the high level of IGLBs profitability, interest in them has been gradually growing since the beginning of this year. In particular, the nominal level of yield on bonds issued during July-August 2019 and denominated in the Ukrainian hryvnia was in the range of 14.30%-18.47%, while on bonds denominated in dollars — from 6.50% to 7.53%.
This level of rate is one of the highest in Europe. For comparison, in Poland, the yield on government bonds is only 1.5%. Such a gap in indicators with European countries is due to a more negative perception of Ukraine and a conservative assessment of the country's risk by the international investment community.
As you can see, the net growth of investments in IGLBs from non-residents since the beginning of this year amounted to about over $3 billion. And this was one of the key factors in the significant strengthening of the national currency.
