The National Bank believes there is no need to stimulate banks to increase investments in domestic government bonds (OVDP). In January 2023, banks introduced the possibility of covering mandatory reserves thanks to the benchmark OVDP. However, starting mid-February this year, the MoF did not place this type of OVDP.
“Currently, there is no need for such stimulation. The demand for OVDP is stable thanks to attractive market rates,” the regulator emphasized.
According to the NBU, as of July 15, banks owned 43% of all OVDP bonds issued by the government.
“The fair value of OVDP in the portfolios of banks reaches about ₴786B and makes up about 25% of the net assets of the banking system,” the NBU notes.
The National Bank sees no risks because banks concentrate significant volumes of their assets in one instrument. Banks are predicted to invest ₴570B in government bonds this year, corresponding to the amount of investments in 2023 (₴566B). So far, the government has already attracted ₴273B from banks.