According to the NBU Depository, in the first six months of 2023, the government of Ukraine raised UAH 195,595.0 million, USD 1,963.9 million, and EUR 640.9 million from placement of domestic government debt securities through auctions and allocated UAH 126,772.3 million, USD 1,763.6 million, and EUR 529.8 million for redemption of domestic government debt securities.
In January–June 2023, the Ministry of Finance borrowed in the domestic debt market UAH 80,530.8 million more (in equivalent) than it spent to redeem domestic government debt securities, specifically UAH 3,072.5 million more in June (in equivalent). The rollover of investments into domestic government debt securities in H1 2023 is 129%.
In total, since russia launched its full-scale invasion of Ukraine through 30 June 2023, the government raised UAH 347,985.6 million, USD 3,892.9 million, and EUR 1,618.2 million from placement of domestic government debt securities through auctions and allocated UAH 340,110.0 million, USD 4,556.9 million, and EUR 1,192.4 million for redemption of domestic government debt securities.
The revival of the domestic debt market became possible thanks to the joint efforts of the NBU and the Government of Ukraine.
At the end of 2022, the NBU and the government of Ukraine, in cooperation with the International Monetary Fund, developed a set of measures aimed at increasing borrowings from the primary market for domestic government debt securities.
In particular, in 2023, the NBU allowed the banks to use benchmark domestic government debt securities from the NBU’s list to meet up to 50% of their total required reserve ratios, and gradually expanded the list. Furthermore, the NBU enabled the repatriation by nonresidents of interest payments received after 1 April 2023 on domestic government debt securities, and, in May, introduced an additional requirement that the investor shall have owned such domestic government debt securities for a certain minimum period that precedes the receipt of said interest.
For its part, the government keeps interest rates on domestic government debt securities at a market-based level. The maximum yield on war bonds issued in June was 19.75% per annum for hryvnia-denominated bonds, 4.80% per annum for U.S. dollar-denominated bonds, and 3.25% per annum for euro-denominated bonds.
The concerted actions of the NBU and the government helped revive the domestic debt market, in particular its hryvnia segment, which is important for ensuring macrofinancial stability. On the one hand, this revival is a safeguard against a return to monetary financing of the budget deficit. On the other hand, it is an important step to improve the maturity structure of funds in the banking system and mitigate risks to the FX market and price stability.
Today, everyone can purchase war bonds and strengthen the financial sustainability of Ukraine.
Find below detailed statistics by NBU Depository on war bonds offered through auctions, as of 1 July 2023.
As before, primary dealers – the banks – hold the largest portfolio of war bonds.
The second-largest portfolio of war bonds is held by Ukrainians and domestic businesses. As of 1 July, it comprised:
- UAH 26,090.9 million or 36.8% of the total value of purchased hryvnia-denominated war bonds (UAH 26,510.4 million or 37.5% as of 1 June)
- USD 822.0 million or 52.6% of the total value of U.S. dollar-denominated war bonds (USD 809.8 million or 42.2% as of 1 June)
- EUR 76.5 million or 12.2% of the total value of euro-denominated war bonds (EUR 74.1 million or 11.8% as of 1 June).
Overall, since the year started, the portfolio of war bonds owned by individuals and legal entities has increased by 71% to reach UAH 59.2 billion, in equivalent.
As of 1 July, nonresidents hold over UAH 12,911.3 million and USD 22.7 million in war bonds, more than 4.5 times the level of six months ago.
In June, the Ministry of Finance redeemed UAH 21,984.0 million of hryvnia war bonds, USD 431.9 million of U.S. dollar war bonds, and EUR 142.8 million of euro war bonds.
Find out more about the military domestic government debt securities here. The table presents data at amortized face value.
On 22 March 2022, the NBU began to publish weekly statistics of the NBU Depository related to war bond transactions. In the beginning of 2023, the NBU switched to monthly publication of relevant releases as of the first day of the month. Previous data are available by tag war bonds.