Fluctuations in the foreign exchange market continue to affect the national debt of Ukraine. According to the National Bank data, the hryvnia has devalued against the US dollar in March 2020 by 12.4%. Against this backdrop, in March 2020, the total public debt and publicly guaranteed debt of Ukraine in national currency grew by 10.1% up to UAH 2 255.5 billion, while in foreign currency equivalent it decreased by 3.6% to USD 80.38 billion.
COVID-19 pandemic announcement, as well as the anticipation of a possible recession in the world economy, could not but affect the activity of investors in the capital market. In March, the Ministry of Finance conducted three auctions for the domestic government bonds placement out of the five planned, which resulted in UAH 33 billion being raised for financing the state budget.
Funds were attracted mainly in foreign currency, but at low rates. At the most recent auction on March 24, the average rates of return on the USD and Euro-denominated government bonds with a maturity of 3 months and 1.2 years made up 3% and 2.22%, respectively. The yield on six-month UAH denominated bonds at the March 3 auction was 9.9%.
Over the reporting period, public debt repayment costs totaled UAH 9.6 billion, including Ukraine repaying a CAD 200 million (USD 141.8 million) loan issued by the Export Development Canada (EDC) in 2015. The loan was leveraged for a period of 5 years at a 1.43% rate aimed to stabilize the economy of Ukraine.
State Budget expenditures on servicing public debt amounted to UAH 20.1 billion.
Cooperation with international financial organizations and partner countries remains a priority for the Ministry of Finance with an aim to ensure the stability of public finances among external sources of financing.