IGLBs market (UAH): The Ministry of Finance tried to revive the demand at the primary
auctions in October, but IGLBs in hryvnia were out of traders’ interest, while IGLBs in dollar
were in great demand. The main reason was the decision of the NBU to keep the discount rate at
the previous level, 8.5%. At its regular meeting, the Monetary Policy Committee did not
introduce a tighter monetary policy to leash the rising inflation. Meanwhile, it reached 1.2%
within the month and reached beyond 11% within the year. Due to the decision of the NBU’s to
keep the discount rate, the yields on all IGLBs kept the September level, in particular: annual
IGLBs remained at the level of 11.5%, 2-year IGLBs — 12.4%, 3-year IGLBs —12.5%, and 6-
year IGLBs — 13%. The total amount of funds raised by the Ministry of Finance in October was
UAH 11.2 billion, remaining at September level as well.
IGLBs Market (USD/EUR): At the initial auctions, the Ministry of Finance managed to gain a
large amount of currency due to a discounted annual IGLBs in US dollars with a yield of 3.7%,
which brought about $ 445 million. There was no demand on the secondary market due to the
strengthening of the hryvnia.
OZDP Market (USD): Demand for OZDP in October revived due to the interest of domestic
traders, which was due to an increase in yields with repayments. Yields on OZDP maturing in
2024-2032 continued the upward trend and reached 5.5%-7.7%.
Deposits: In October, deposit rates remained unchanged: the short-term hryvnia and dollar
deposits (UIRD 3m) – 7% and 0.4%, the annual hryvnia and dollar deposits (UIRD 12m) – 8.6%
and 0.9%, respectively.
Foreign exchange market: The hryvnia against the dollar continued the upward trend and grew
by 1%, from 26.58 to 26.36 UAH per 1 USD. The main reasons for the stability of the national
currency remained unchanged: strong exports from metal producers, farmers and the IT services.
Stock Market: After the September correction, US indices skyrocketed to the highest in
October, in particular: the S&P 500 and Dow Jones rose to 6.7% and 5.5%, respectively. The
Ukrainian market (UX index) dropped by 0.3%, where most of the shares included in the index
showed a downward trend.
Actions of the NBU: In October, the NBU Monetary Policy Committee maintained the discount
rate at 8.5%. This step was taken due to the fact that “a lot had been done, but inflation was still
growing”. The market responded accordingly decreasing the spreads of the IGLBs, although the
vast majority of traders expected the discount rate to rise along with upward inflation.
