Ukraine: NBU allows banks to lend short term to non-residents for buying domestic bonds

The central bank (NBU) has allowed commercial banks to lend hryvnias short term to foreign firms for purchasing domestic bonds (OVDP/OVGZ). From today, Ukrainian banks can issue respective loans to foreign firms and banks, as well as do forward and swap transactions for up to 14 working days, the NBU said in a press release last night. The NBU recalled that the launch of a connection to the security depository Clearstream late last month made it easier for foreigners to invest in government bonds.

In mid-May, the FinMin said that the government bond portfolio of non-residents grew six-fold to UAH 39.7bn (USD 1.5bn) since Jan 1. Earlier this week, the FinMin issued debut six-year domestic bonds for UAH 3.4bn. Non-residents bought most of them, said FinMin Oksana Markarova.

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