Investors focus on Ukraine government bonds and their preferences are shifting toward longer maturities.

On August 5, the Ministry of Finance of Ukraine borrowed over UAH 18B ($429M), mostly from USD-denominated paper and four-year notes. The smallest amount came from bills with less than two years to maturity. Fourteen-month bills brought UAH 552B to the budget, while 19-month bonds raised UAH 398M. Three-year notes contributed UAH 1.3B. Meanwhile, a new four-year note was oversubscribed, doubling the UAH 10B cap.

Such demand, with interest rates around 15%, which is below the rates for a three-year bond, suggests this paper will act as a reserve instrument. However, the cut-off rate increased by 16 basis points to 15%, and the weighted-average rate rose by 21 basis points to 14.84%. Finally, the FX-denominated bill was almost three times oversubscribed.

The Ministry of Finance offered $140M worth of bills, which attracted nearly $412M in demand. Interest rates remained mostly unchanged, as the MoF rejected only two bids, with some partially fulfilled.