The Ministry of Finance of Ukraine at the primary auctions for the placement of domestic government loan bonds on Tuesday, after the National Bank raised the discount rate from 14.5% to 15.5% per annum, increased the cutoff rates on market bonds maturing in 16 and 27 months by 0.5 percentage points (p.p.), to 16.35% and 17.45% per annum, respectively.

According to the data at the Finance Ministry's website, demand at these auctions increased compared to the previous week by 2.3 and 6.3 times, respectively, to UAH 2.16 billion and UAH 3.8 billion (nominal value), although it was still lower than the offer of UAH 5 billion at each auction.

Some buyers hoped for a larger rate increase, but the Finance Ministry refused them and declined six out of 30 bids for the purchase of 16-month bonds at rates up to 16.85% totaling UAH 1.8 billion and five out of 36 bids for the purchase of 27-month bonds at rates up to 17.95% totaling UAH 760,000 million.

As for the auction for the sale of bonds maturing in three and a half years, which is included in the list of benchmark domestic government loan bonds for forming mandatory reserves from this Tuesday, due to high demand from banks, the Finance Ministry was able to even reduce the cutoff rate by 0.1 p.p., to 15.89% per annum.

Out of 40 bids submitted totaling UAH 22.34 billion at rates up to 16.5%, some 26 bids were fully or partially satisfied, allowing all bonds for UAH 5 billion to be placed and bringing the issue volume of the target size of UAH 20 billion.

As a result, the Finance Ministry raised UAH 8.54 billion at the three auctions on Tuesday, compared to UAH 6.67 billion a week ago.