The tendencies observed in different sectors in March 2021 were:
IGLBs market (UAH): In March, the Ministry of Finance has continued selling IGLBs at the primary auction with same level of yield wise as in February. Three-months IGLBs are being sold with set yield of 7.8% to 8%, one-year IGLBs are11.65%, two-year and six-year IGLBs are being sold with 12.05% and 12.5% of yield, respectively. The domestic financial instruments were in higher demand among investors, both international and domestic, at the beginning of the month. The news of halting cooperation with the IMF, an increased discount rate by 0.5% and possible escalation in the east of the country had a negative impact on the volume of placements at the end of the month. The one-year IGLBs were traded better. The total raise by the Ministry of Finance in March reached UAH 46.3 billion.
IGLBs Market (USD): The Ministry of Finance has raised 3.9% US Dollar IGLBs by 0.1%. The demand for foreign exchange instruments stood still and facilitated about $ 250 million raise by the Ministry of Finance. In the secondary market, there was no supply among IGLB holders due to stability of the hryvnia.
OZDP market (USD): Halted cooperation of Ukraine with IMF and escalation at the eastern Ukraine became the main factors influencing the prevailing supply of Ukrainian Eurobonds. As a result, OZDP yields maturing in 2021-2028 increased from 4.8% -6.7% to 5.5%-7.5%. Possible active hostilities in the east of the country amid no comments by the government on the comeback of cooperation with IMF in the future, will have a negative impact on demand among investors in the OZDP.
Deposits: Deposit rates continued the trends of February: short-term deposits in hryvnia kept the level of 7.4%, while short-term deposits in dollar (UIRD 3m) did 0.4%; one-year deposits in hryvnia kept the level of 8.4% , while one-year deposit in dollar(UIRD 12m) did 1.1%.
Foreign exchange market: In March, the hryvnia was fluctuating against the dollar at the wise of 27.7 – 28.0 and finished the month by stand at UAH 27.88 per USD 1. Again, strong export from steel producers and farmers, as well as demand from foreign investors for IGLBs became the force keeping the national currency stable.
Stock market: New stimulus to the US economy from the Biden administration, lower inflation rates in the US compared to analysts’ forecasts and active vaccination in key developed countries have laid the basis for the uptrend to continue and reach new historical highs in global stock markets. The Ukrainian stock market, the UX index, joined the global uptrend and showed rise by 5.5% in March. Shares of PJSC Ukrnafta and PJSC Centerenergo showed the largest growth among index representatives, raising by 22.4% and 6.8%, respectively.
NBU trading activity: In response to rising inflation started the 2021, namely by 1.3% in January and 1% in February, the NBU Monetary Policy Committee in March raised the interest rates by the wise of 0.5-6.5%. Administratively regulated prices and prices for raw foodstuffs, growing in February to 12.1% YOY and 9.7% YOY, respectively, were the main causes for inflation growth.
