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NBU still in discussion about possible 'unfreezing' of its govt bonds, counts on convergence of positions with Finance Ministry – Deputy NBU governor
KYIV. Oct 12 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) has not yet decided on the date of entering the market with its portfolio of government domestic loan bonds, and if it makes such a decision, it will determine the time for the introduction of a new instrument, taking into account the situation in the financial market and the economy, Deputy Governor of the NBU Yuriy Heletiy has said.
"Today, I can’t say with absolute certainty that we will introduce this tool. The transmission continues, we are observing the situation on the foreign exchange market and at the same time we are analyzing in detail both the potential benefits and possible disadvantages of such a step," he said in an interview with Interfax-Ukraine.
Heletiy said that the National Bank is discussing the functioning of the domestic debt market with the Ministry of Finance.
"It is important to bring our positions closer. For the NBU, first of all, it is important to ensure an effective monetary transmission," he said.
The deputy governor of the National Bank added that it is extremely important to offer the market an instrument that will serve as a protection for hryvnia savings and will allow withdrawing some of the excess liquidity from the banking system, which puts pressure on the foreign exchange market and generates risks for the exchange rate.
According to him, the parameters of a possible entry into the market are still being worked out.
"All I can say is that we could offer tools to make the purchase of government bonds from our portfolio an attractive tool for savings," Heletiy said.
He said that the NBU does not plan to enter the REPO market today.
Commenting on the situation on the secondary government bond market, which opened on August 8, the deputy governor of the National Bank stated that, unfortunately, there are no large volumes of transactions due to the factor, but the yield curve has already formed on it.
"We trust this curve, we take it into account within the National Bank when determining yield rates," Heletiy said, pointing out that since September 12 it has been published on the website of the Central Bank and that rates of 20-21% per annum on bonds with a maturity of about a year are market.
He said that the National Bank is interested in banks actively creating opportunities for Ukrainians to access the secondary government bonds market, where rates are higher.
"In general, we see that banks and other market players are actively working in this direction. For its part, the NBU is ready to help and advise if market participants need such a need," Heletiy added.
