The Ministry of Finance sold only two bills on Feb. 15 and raised just a mere Hr 66m. Demand was a little higher, but the Ministry decided not to raise the cut-off rate on the 11-month paper.
For five-month bills, all demand was at a rate of 11.6%, which was 10bp higher than at the beginning of the month. These bills brought Hr 55m to the budget. However, 11-month bills received bids amounted to Hr 16m with rates ranging from 11.93% to 12.1%. Therefore, the Ministry decided that raising the rate for Hr 5m was not worth it, so it kept both the cut-off and the weighted average rate at the same level as last week, 12% and 11.93%, respectively.
The Ministry decided not to offer the rest of the bond issues that were scheduled for yesterday. Obviously, there was no demand for them, and if there had been, it could be too expensive under current conditions.
Fortunately, it appears that budget revenues are sufficient to meet current budget expenditures, including debt payments.
Sentiment in the bond markets has deteriorated due to the threat of a Russian invasion in the near future, which discourages investors. Therefore, borrowing in the near term may continue to be difficult until there is some reassurance that the situation at the eastern border has improved and information flow is more positive in general.
RESEARCH TEAM: Taras Kotovych
Complete report (4 pages)
