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20 I Companies & Markets bne November 2023
“Looking ahead to 2024 and 2025, we anticipate a gradual, managed depreciation of the hryvnia, aligning with yields
on hryvnia deposits,” says Vavryshchuk. “This approach
aims to maintain the attractiveness of hryvnia-denominated instruments and discourage massive conversion of hryvnia savings into foreign currency. Consequently, the NBU is expected to maintain a relatively high real policy rate in the coming years. Our end-2024 exchange-rate projection remains unchanged at UAH42 per dollar.”
The NBU is well-prepared to manage the FX market situation, boasting substantial reserves that stand at nearly $40bn, significantly higher than pre-war levels,” says Vavryshchuk.
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This reserve level equates to over five months' worth of future imports, providing a strong buffer. While potential disruptions to international financial aid inflows from the US could impact further reserve accumulation, it is unlikely to result in a significant reduction in existing reserves, as long as inflows from other allies remain intact.
Regarding FX liberalisation measures, the NBU is expected to proceed cautiously in the coming quarters, taking incremental steps to facilitate cross-border trade operations. Rapid liberalisation of flows related to external private debt and foreign direct investment (FDI) is viewed with scepticism.
North Macedonia announces debut green bond issue
Valentina Dimitrievska in Skopje
North Macedonia's finance ministry will hold the first-ever green bond issue in the amount of €10mn on October 3, the government announced on September 27.
This is the second new financial instrument introduced by the ministry on the domestic capital market this year, diversifying the range of financial products and fostering competition.
Green bonds are specifically designed to support initiatives aimed at enhancing and safeguarding the environment,
as well as financing environmental projects. Similar to the previously introduced civil bond, this is a novel addition to the domestic market.
Individuals and legal entities interested in participating can submit participation requests through their respective banks by October 2. The annual interest rate of the new bonds, with a maturity of two years, is set at 4.75%.
"The introduction of this instrument aims to cultivate the capital market in our country, thereby stimulating investment activity that will contribute to accelerated economic growth," Finance Minister Fatmir Besimi said.
Proceeds from this auction will be channeled towards the Energy Efficiency Fund within the framework of the the country's state-run Development Bank. This will provide companies with favourable financing for projects focused on environmental protection.
The introduction of the green bond in the securities market
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follows the successful launch of the civil bonds in July 2023, which received interest that was two and a half times higher than the published prospectus amount.
In accordance with the Capital Market Development Strategy and the Plan for Accelerated Economic Growth, additional offerings such as project bonds and development bonds, targeted at development and infrastructure projects, will be introduced to the market in the near future.
Furthermore, following the issuance of the green bond, a second civil bond is also planned.
North Macedonia's finance ministry is seeking to develop the local capital market with new financial instruments. / bne IntelliNews