NBU still uncertain whether to unfreeze its domestic govt bonds - bank's deputy governor

MOSCOW. Oct 12 (Interfax) - The National Bank of Ukraine (NBU) has not yet chosen a date for placing its own portfolio of domestic government bonds on the market, and if the bank adopts this decision, it will select a date for its bond placement depending on the situation on the financial market and in the economy, NBU Deputy Governor Yury Geletiy said.

"As of today, I cannot say with 100% certainty that we will introduce this instrument. The transmission process is continuing. We are watching the situation on the currency market, simultaneously analyzing in detail both the potential benefit and possible drawbacks of such a step," Ukrainian media quoted the banker as telling journalists.

The NBU is discussing the functioning of the domestic bond market with the Finance Ministry, Geletiy said.

"It is important to bring our positions closer. For the NBU, it is important first and foremost to ensure an efficient monetary transmission," he said.

Furthermore, it is immensely important to offer the market an instrument that will help protect hryvnia-denominated savings and will make it possible to remove a certain amount of excessive liquidity from the banking system that is putting pressure on the currency market and is generating exchange rate risks, Geletiy said.

Parameters for the NBU bonds' possible placement on the market are still being worked out, he said.

"The only thing I can tell you is that we should be able to offer instruments in order to make buying domestic government bonds from our portfolio an attractive instrument of savings," he said.

The NBU also has no immediate plans to enter the repo operations market, he added.

When commenting on the situation on the secondary government bonds market, which opened on August 8, Geletiy said that, unfortunately, it does not yet see large amounts of transactions because of the factor, but the yield curve has already formed there.

"We trust this curve and take it into consideration within the National Bank when determining yield rates," Geletiy said, adding that it has been published on the NBU website since September 12, and the annual 20%-21% rates on bonds with redemption periods of about one year are market-based.

The NBU is interested in banks acting more rapidly to enable Ukrainian citizens to access the secondary government bonds market, where rates are higher, he said.

"On the whole, we see that banks and other actors are actively working at it. The NBU, for its part, stands ready to help and offer advice if market players need it," Geletiy said.