GENERAL ECONOMIC CONDITIONS

March was marked by an escalation of geopolitical tensions in the Middle East. Events in Iran triggered a sharp increase in global energy prices, intensifying inflationary pressure across most economies worldwide. A potential prolonged blockade of the Strait of Hormuz poses significant risks to the global economy and may negatively affect annual inflation indicators.

Against this backdrop, the National Bank of Ukraine adopted a wait-and-see stance, keeping the key policy rate unchanged at 15% in March and pausing the transition toward monetary easing. The regulator estimates a potential additional increase in annual inflation of at least 0.45 percentage points, while a further rise in oil prices could amplify this impact considerably. A detailed assessment of the effects of energy price dynamics across different sectors of the economy is expected to be published by the NBU in April.

HRYVNIA INSTRUMENTS

In March, yields on hryvnia-denominated government bonds (OVDPs) at primary auctions declined to their lowest levels in recent months:

• 1-year: down from 15.32% to 15.15%
• 2-year: 15.85%
• 3-year: down from 16.28% to 16.15%

Interest rates on term deposits in the banking sector remained at February levels following the previous 50 bps decline, ranging between 9% and 14% in hryvnia. Dollar deposit rates remained unchanged at up to 2%, depending on maturity.

The Ministry of Finance of Ukraine continued issuing FX-denominated government bonds in March with a yield of 3.47% in USD, down from 3.8% in February. On the secondary market, yields on FX OVDPs did not exceed 3.4% in USD and 1.5% in EUR.

FOREIGN EXCHANGE MARKET

In March, demand for foreign currency again exceeded supply, leading to a depreciation of the hryvnia against the US dollar from 43.13 to 43.78 UAH/USD. To smooth exchange rate fluctuations, the National Bank of Ukraine significantly increased FX interventions by 59.5% to USD 4.77 billion.

The exchange rate is expected to stabilize within the range of 43.5–44.5 UAH/USD in Q2 2026, assuming no additional external shocks.

EXTERNAL MARKETS AND EUROBONDS

A negative factor for Ukraine’s external debt market in March was the blocking of the EU’s “reparations loan” decision by Hungary, which reduced the attractiveness of Ukrainian Eurobonds. As a result, their prices declined by 8.6%–15% depending on maturity.

PERFORMANCE OF OTP CAPITAL FUNDS

OTP Classic

In March, government bonds worth UAH 3.3 million were sold from the OTP Classic fund portfolio, while OVDPs worth UAH 3 million were purchased at improved yields.

For the reporting month, the fund delivered a return of 1.0% and 14.4% over the last 365 days.

OTP Kids

In March, OVDPs worth UAH 13.5 million were sold from the OTP Kids fund portfolio, while UAH 16.2 million were reinvested into longer-maturity government bonds. The restructuring was aimed at increasing portfolio yield.

The fund’s monthly return amounted to 1.6%, and 18.0% over the last 365 days.

OTP Equity Fund

Fund management in March focused on reallocating assets into short-term deposits offering maximum rates, including reinvestments of UAH 1 million in JSC UkrEximBank and UAH 1 million in JSC Ukreximbank.

The fund’s return in March was 0%, and 3.1% over the last 365 days.

OTP Valutnyi

In March, USD 14 thousand were invested in FX-denominated government bonds.

A sharp decline in Eurobond prices negatively affected the fund’s performance: -6.4% for March and 3.7% in USD over the last 365 days.

OTP Maximum

Fund management in March focused on active portfolio rebalancing within government bonds to increase yield. Specifically, OVDPs worth UAH 3.8 million were sold, while UAH 4.5 million were reinvested into higher-yield instruments.

As a result, the fund delivered a return of 1.6%, equivalent to 19.9% annualized.