Fixed Income

October 05, 2020

The yield for UAH-denominated 1-year treasuries increased by 20 bps to bid/ask of 10.7%/9.7%. The Finance Ministry raised UAH 1.9bn from placing a 7-month bond at 8.0% yield. Meanwhile, proceeds from the placement of 1-year debt papers at 9.5% were only UAH 25mn, and the placement of 2-year bonds at 10.5% brought in just UAH 88mnm, indicating that large investors are expecting to see higher yields for these offerings. On the currency front, the hryvnia ended marginally lower against the dollar for the week, slipping 0.2% to 28.36 UAH/USD. We expect some support for the national currency from rising prices for grains, the country’s major export category. Wheat prices have been rising steadily since August in the EU and the Black Sea as global buyers rush to the market amid this year’s drought conditions in key regions. Ukraine’s wheat was selling at USD 231 per tonne (FOB Black Sea) on Sept 30, up from USD 206/tonne on Aug 31, Platts commodity data showed. According to the US Departmen