Fixed Income

October 31, 2017
 

Ukrainian sovereign Eurobonds ended lower after the National Bank raised its key interest rate on a worsening inflation outlook and warned about the risks related to the delay of the planned IMF disbursement. The regulator raised its key rate to 13.5% from 12.5% breaking a trend of gradual cuts since 2015. The NBU believe that in case the country meets the IMF requirements then USD 3.5bn from the Fund could be unlocked in 2018, including USD 2bn in 1Q18. Kyiv and the IMF now has different views on gas pricing for households as the government wants to keep price unchanged for a political reasons despite earlier agreement to use an import parity price formula. According to the central bank, the IMF mission is due to visit the country in November.