NBU monetizes another UAH 1.4 bln bonds held by PrivatBank
The National Bank of Ukraine (NBU) on January 12 bought government domestic loan bonds worth UAH 1.4 billion from PrivatBank (Dnipro), which were issued by the Ministry of Finance for capitalization of the financial institution after its nationalization.
According to the website of the central bank, PrivatBank used funds received from the sale of securities for formation of mandatory reserves.
"That is, in fact they remain on the bank's correspondent account at the NBU," the report says.
The NBU noted on December 28, 2016 it bought government bonds for UAH 25.8 billion from PrivatBank. The bank used funds obtained from the sale of bonds mainly for paying off debts to the central bank on refinancing loans. Thus, funds from bonds monetization are not directed to repayment of deposit outflows and, accordingly, will not have much influence on the foreign exchange market and the level of inflation.
