October 06, 2017 | Cbonds
Although the direction of cash flows changed yesterday, banking sector liquidity (except govt bonds) declined once more. Banks' correspondent accounts with the NBU fell UAH1.66bn to UAH41.42bn while total CDs outstanding was up just UAH1.32bn. At the 3-month (69 days) CD tender, the NBU received only UAH0.38bn of demand and satisfied it at 13.50%, significantly above 12.70-12.89% seen earlier for these CDs when the NBU accepted only part of the demand under the limit.
The main reason for such results was fund outflows, but this day not to Treasury accounts. Treasury operations' net inflows was UAH1.02bn for the first time after seven days of outflows. Although other operations also changed their direction and banks exchanged UAH0.24bn of reserves into cash, the main outflow was caused by the NBU via the FX auction.
Investment implications: Expectedly, the FX auction caused fund outflows; inflows from the Treasury did not avert this but merely prevented further declines. As declines are becoming less severe, liquidity should recover soon, albeit slightly.
|Full company name||ICU|
|Country of risk||Ukraine|