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government bonds, boosting liquidity and their attractiveness in the international market. As a result, the Ukrainian government will benefit from a wider range of sources of long-term funding and a lower cost of borrowing. Moreover, the offering will improve the currency structure of public debt and transmission mechanism of the NBU monetary policy, while contributing to the further development of the Ukrainian capital markets,” MinFin said.
The reform comes in the nick of time as Ukraine is facing a debt mountain this year after bonds payments were delayed five years ago in the midst of an economic meltdown. Repayments over the next five years will rise to between $12bn and $15bn a year – sums that will be impossible without expanding the amount of money the government can raise on the domestic market.
Yuriy Butsa, Ukraine Government Commissioner for Public Debt Management, commented: “We are happy that finally the last major bottleneck for the global local currency bond investors has been removed. This year we are witnessing a significant increase in the international investors’ participation in the local- currency bonds market. Foreign investors' holdings in Ukrainian domestic government bonds exceeded $1.5bn and continue to grow. With the Clearstream link opening, there is a great potential for the increase of the share of non-residents holdings of domestic government bonds as it is still around 5% of total local currency debt as of today, which is much smaller compared to other emerging market countries.”
The NBU launched the project on establishing correspondent relationships with Clearstream three years ago, according to Oleg Churiy, Deputy Governor of the NBU.
“Creating easy access for foreign investors to Ukrainian government securities will foster long-term investments in hryvnia instruments, reduce the state’s need for financing in foreign currency and respectively currency risks. We will continue to make domestic government bonds more attractive and its secondary market more liquid. In that respect, one of the next steps should be expansion of trading these instruments at the international trading platforms,” Churiy said.
2.1 Zelenskiy launched his e-government concept "country in a smartphone”
Ukrainian President Volodymyr Zelenskiy launched his e-government concept on May 23 saying he will implement the "country in a smartphone" to make up for Ukraine's lag in e-government development.
"There is a UN report on the development of e-government for 2018, and we can clearly see what we shall strive for. No matter how regrettable it may sound today, but we are behind Kazakhstan, Belarus, Uzbekistan, Georgia, Moldova, the Baltic countries and the aggressor," he said, speaking at the iForum 2019 in Kyiv, as cited by Interfax Ukraine.
Despite its prowess in IT, Ukraine lags a long way behind its peers in Eastern Europe in putting government services online. Zelenskiy noted said the programme will come in four stages: the first is information about the state, the second is communication with the state, the third is transactions with the state, and the fourth is involvement in governing the country.
13 UKRAINE Country Report June 2019 www.intellinews.com