Finance ministry, NBU interested in arrival of nonresidents to government bond market – minister

Ukraine's Finance Ministry believes that the priority task in the public borrowing sphere is the increase of demand on hryvnia-pegged tools on the domestic market, Finance Minister Oleksandr Danyliuk has said.

"It is important for us that foreign investors arrive to the local market. We jointly with the NBU [National Bank of Ukraine] are intensifying our efforts to create the conditions for their arrival," he said in an interview with Interfax-Ukraine.

Danyliuk said that the Finance Ministry is actively interacting with primary dealers and has optimized the range of tools on the domestic market to boost the interest to them.

He said that now there is a task to meet the domestic borrowing target set in the law on the national budget for 2017 (UAH 103.9 billion with the foreign borrowing target of UAH 70.9 billion).

Commenting on plans to return to the eurobond market, he said that Ukraine today could enter it and attract several billions of U.S. dollars.

"We can place the bonds at 9% now, but we do not want to do this… When we are ready and when there are favorable conditions we will place the bonds for the sum that would be required at the moment," Danyliuk said.

The minister said that at present there are two reasons why Ukraine refrains from entering the capital market.

"First we do not need additional loans. Secondly, our steps aimed at improving the economy naturally reduce the risks for our debt tools and influence the cost of capital for borrowing," he said.

The minister said that after adoption of key reforms and with growth of the economy in Ukraine the interest for its securities would fall.

Danyliuk said that conducting of reforms as part of cooperation with the International Monetary Fund (IMF), in particular, healthcare, pension, energy and fiscal reforms, would allow Ukraine to service its debts without IMF assistance after the completion of the program with the IMF in 2019.