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26 I Companies & Markets bne September 2019
a benchmarking exercise for Russian corporate that issue on the international capital markets.
More importantly the new sanctions do not include the Russian Ministry of Finance ruble-denominated OFZ treasury bills, which is the workhorse bond for funding the Russian budget and also widely held by international investors, who own 30% of the outstanding notes. Fitch acknowledged the Kremlin’s successful attempts to sanction proof the economy.
Ukrainian hryvnia flying this year as foreign investors pile into local bond market
bne IntelliNews
The Ukrainian hryvnia is flying this year as foreign investors pile into the local bond market following
its tie-up with international payments and settlements system Clearstream.
“The Ukrainian hryvnia continues to strengthen, today
it crossed UAH25/$1. It was last this strong three years ago in August 2016. The hryvnia has strengthened 10.7% in relation to the $ from Jan 1, 2019,” Anders Aslund,
a Swedish economist and a senior fellow at the Atlantic Council said in a tweet.
“Increased exchange rate flexibility and compliance with the fiscal rule support the economy's capacity to absorb real, financial and geopolitical shocks, and limit the impact of
oil price volatility on the economy,” Fitch said.
Russia’s finance ministry welcomed Fitch’s decision to increase Russia’s ratings saying it was an acknowledgement of the country’s rock solid macro fundamentals.
The hryvnia has strengthened by 9.6% YTD against the dollar as foreigners keep pumping money into the hryvnia-denominated so-called “Borscht bonds,” according to the ICU in Kyiv.
Foreign investors have already bought some $2.5bn worth of local bonds and their share is now circa 7% of the total bonds outstanding from next to nothing a year ago.
“Despite already purchasing $2.5bn into reserves, the National Bank of Ukraine (NBU) has been criticized for buying too little allowing the hryvnia to appreciate too much,” ICU said in a note.
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