The Ministry of Finance of Ukraine Attracted $94 Million to State Budget

by Vladyslava Zhabrovets
Thursday, October 7, 2021
2 MIN

On October 5, auctions for the sale of domestic government bonds were held and replenished the state budget

According to the press service of the Ministry of finance’s message on Facebook, investors were offered 6 issues of securities in hryvnia.

The average weighted yield of 6-month government bonds was 9.70%, 1-year-olds 11.50%, 1.5-year olds 11.57%, 2-year olds 12.40%, 3-year olds 12.49%, and 5-year-olds 12.75%.

"The greatest demand and focus was centered around instruments from 1 to 2 years," added the Ministry of finance representatives.

At the auction on September 14, the Ministry of finance raised $45 million to the budget from the sale of domestic government bonds, rates on bonds maturing up to 1.5 years increased by 22 - 100 bp.

At an auction on September 21, the Ministry of finance raised $190 million to the budget from the sale of domestic government bonds, rates for securities with a maturity of 1 - 3 years increased.

At an auction for the placement of domestic government loan bonds on September 28, it attracted $260 million to the Ukrainian budget.

The sale of government debt securities to investors can serve a variety of purposes. The attracted funds cover the budget deficit and are used to finance state investment programs and projects.

Among the buyers of debt securities on the primary market are mainly large institutional and private investors who, due to the size of their capital, cannot buy securities on the secondary market without loss of profitability. Investors can also expect that due to low demand, the auction will be able to get better terms than in the secondary market.

In theory, anyone can take part in such auctions. However, in practice, brokers and banks that provide clients with access to the Ministry of finance auctions can set certain restrictions on the minimum amount of capital or provide such a service only to a certain category of clients.

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