“The National Bank of Ukraine deems foreign currency denominated T-bills intended for households to be an extremely attractive instrument for the Ukrainian financial market,” stated Director of the NBU Department of Foreign Exchange Reserve Management and Open Market Transactions Oleksandr Dubikhvist at the seminar for regional mass media representatives, which was held on 1 March 2012.
"As of 1 February 2012, foreign exchange deposits from households (in the dollar equivalent) total USD 18.8 billion, whereas cash foreign exchange circulating outside banks exceeds this figure,” said Oleksandr Dubikhvist.
“These funds have to work for the benefit of the Ukrainian economy and foreign currency denominated T-bills are capable of attracting the largest portion of these funds,” noted Oleksandr Dubikhvist, adding that “issuance of foreign currency denominated T-bills will make it possible to attract a significant volume of funds to the economy of Ukraine and reduce the cost of foreign currency borrowing. Overall, it will have a positive effect on the balance of payments and promote the development of the capital market of Ukraine.
Since the beginning of 2012, earnings from placement of foreign currency-denominated Treasury bills at the primary auctions have reached USD 279 million. Both legal entities and natural persons can purchase foreign currency-denominated T-bills.
“The National Bank of Ukraine currently sees good interest in this instrument from households and conducts a dialogue with the Ministry of Finance of Ukraine on the simplification of the procedure for investing in the foreign currency-denominated T-bills,” said Oleksandr Dubikhvist.
He also reminded that from the start of the year the average weighted yield of foreign currency-denominated T-bills stands at 9.27% per annum, being higher than that on foreign currency deposits and can be used as loan collateral. Natural persons are exempt from tax on interest income arising from interest accrued on foreign currency-denominated T-bills, whereas the gross issuance of foreign currency-denominated T-bills is covered by a 100 percent State guarantee.
50 journalists from all the regions of Ukraine attended the seminar for regional mass media representatives, which was held by the National Bank of Ukraine under the auspices of the USAID Financial Sector Development Project (FINREP).